Dried Fruit

Desiccated coconuts: El Niño is still apparent

March 13, 2024 at 2:45 PM , Der AUDITOR
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MANILA/KUALA LUMPUR. Although the weather phenomenon is slowly weakening, the effects of one of the strongest El Niño weather events since records began are still being felt. Prices are rising on the palm oil market.

Floods in the Philippines

The El Niño weather phenomenon continues to play a decisive role in coconut cultivation and market development. With reference to the World Meteorological Organization, the experts at T.M. Duché report that the current El Niño weather event is one of the strongest since records began and that the effects have been affecting the agricultural economy of many countries for months. They are currently weakening somewhat, but will continue to influence global weather patterns until at least the middle of the year. For example, the above-average sea-surface temperatures in large parts of the world's oceans over the next three months are likely to cause temperatures to rise in many land areas and also influence precipitation patterns. T.M. Duché adds that coconut cultivation in the Philippines is already affected by all these impacts. Flooding in recent months has caused damage to infrastructure, including bridges, and reduced crop yields in some areas of the Philippines.

Lower palm oil production

Meanwhile, Malaysian palm oil futures have continued to rise and are not expected to fall for the time being. Market experts attribute this primarily to the strength of competing edible oils, firmer crude oil prices and hopes of robust demand in the near future. Global palm oil production is expected to have fallen in the first quarter of 2024, causing stocks to shrink significantly. Meanwhile, Reuters estimates that Malaysian palm oil stocks fell below 2 million mt for the first time in six months at the end of February, while production fell for the fourth consecutive month. At the same time, imports from the most important customer, India, declined as consumers here are increasingly switching to sunflower oil. Overall, there are repeated delays in export deliveries, partly due to the strained situation in the Red Sea. The situation therefore remains tense for the time being, and T.M. Duché advises buyers not to put their orders on the back burner, as a supply shortage is not unlikely over the course of the year.

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