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Early hot, dry weather linked to El Niño is threatening food output across Asia, according to analysts. Palm oil and rice production in Indonesia and Malaysia, which together supply about 80% of world palm oil, along with Thailand, are likely to suffer.
Water stress in Sabah estates is already cutting yields.
Palm oil supply from Indonesia and Malaysia is concentrated, so El Niño-driven yield losses could tighten global vegetable oil supply and lift prices. Lower rice output in Southeast Asia would add to upward pressure on rice prices.
reuters.comJul 7, 2023After 181 past bullish weather events, Palm Oil moved a median +0.5% over 5 sessions (56% higher; middle half -0.9% to +1.9%), and +0.3% over 20.
After 179 past bullish weather events, Rough Rice moved a median +0.4% over 5 sessions (55% higher; middle half -1.4% to +2.5%), and +2.2% over 20.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
