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Section 1 : Palm Oil Price Fundamentals:
Upcoming La Nina and CPO Price
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By: Mr. Ling Ah Hong
Mr. Ling graduated from the University of Malaya with a Bachelor of Agricultural Science (Honors).
He has more than 40 years of experience in research and management of plantation crops and companies. He was a former Executive Director of IJM Plantations and his other past positions include: Research Officer with FELDA, Senior Agronomist in Dunlop Estates (now part of IOI Corporation), Plantation Controller of Perlis Plantations (now part of Wilmar International), Chief Operating Officer for Hap Seng Plantations. Mr. Ling has authored and co-authored numerous publications on oil palm and cocoa in Malaysia. He is also a frequent speaker at international conferences and seminars organized by Bursa Malaysia, GAPKI, MPOC, MPOB and investment banks.
He is currently the Director and Principal Consultant of Ganling Sdn Bhd, a Malaysian-based company focusing on plantation research, consulting and investments.
GANLING specializes in weather-based palm oil forecasting, benchmarking and productivity improvement programs and performance analysis of plantation companies.
Ganling is a consultant to a number of listed oil palm companies and banks in Malaysia and South East Asia and also an associate to LMC International, London, in the publication of: Oil Palm Quarterly Report – Indonesia and Malaysia. 
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Weather is one of the key drivers in the production and supply of almost of all oilseeds and palm oil and a major catalyst for price movement. This paper examines the possible emergence of La Nina weather conditions after a strong 2015-16 El Nino event and the likely effects of La Nina on palm oil supplies and price trends.
In May 2016, the main El Nino monitoring agencies - the Australian Bureau of Meteorology (BOM) and US National Oceanic and Atmospheric Administration (NOAA) officially declared the end of the 2015 El Nino conditions in the central equatorial Pacific region.
The 2015-16 El Nino is one of the strongest events recorded in history since 1900 and has disrupted the normal rainfall patterns in South East Asia and caused widespread and severe droughts in Indonesia, Malaysia and Thailand (key palm oil producing countries which account for some 88% of the global palm oil supply). The historic droughts had stunted palm tree growth and started to crimp production in 2016.
Most climate models indicate that the El Nino has now entered the ENSO neutral conditions and there is a 50-75% chance that La Nina weather conditions will develop by Q3 2016.
The likely effects of this upcoming La Nina on rainfall patterns, palm oil yield and supply were analyzed (using the Ganling weather-based forecasting model).
How will the upcoming La Nina event affect palm oil and oilseed production in 2016 and 2017? What is the likely impact of the La Nina on palm and vegetable oil prices? Will this La Nina provide further catalyst for upward price movement in the vegetable oil complex?
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Section 1 : Palm Oil Price Fundamentals |
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MITIGATING THE NEXT WAVE OF MARKET UNCERTAINTIES Nov 14, '22 ~ Nov 18, '22 |
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ASSESSING 2022: MANAGING OPPORTUNITIES AND RISKS Mar 28, '22 ~ Apr 01, '22 |
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Section 2: Opportunities for Palm Oil in Asian Market Oct 18, '21 ~ Oct 24, '21 |
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Section 1: Oils & Fats Supply, Demand and Outlook Oct 18, '21 ~ Oct 24, '21 |
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Section 2 : Special Focus on the US Apr 05, '21 ~ Apr 11, '21 |
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POINTERS ON THE PRICE TRENDS Jun 22, '20 ~ Jun 28, '20 |
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Section 1 : CPO Price Trend Feb 24, '20 ~ Mar 01, '20 |
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Section 2: Global Palm Oil Market Opportunities Feb 24, '20 ~ Mar 01, '20 |
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Section 2: Special Focus Aug 19, '19 ~ Aug 25, '19 |
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Section 1 : CPO Price Trend Aug 19, '19 ~ Aug 25, '19 |
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Special Focus - India Feb 25, '19 ~ Feb 24, '19 |
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Section 1: CPO Price Trend Feb 18, '19 ~ Feb 24, '19 |
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Section 2: Global Palm Oil Market Focus Aug 06, '18 ~ Aug 12, '18 |
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Section 1: CPO Price Trend Aug 06, '18 ~ Aug 12, '18 |
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Section 2 : Global Palm Oil Market Focus Jan 29, '18 ~ Feb 04, '18 |
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Section 1: CPO Price Trend Jan 29, '18 ~ Feb 04, '18 |
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Section 2: Regional Focus : CIS Countries Aug 21, '17 ~ Aug 27, '17 |
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Section 1: Palm Oil Price Fundamentals Aug 21, '17 ~ Aug 27, '17 |
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Section 2: Market Challenges and Opportunities Feb 20, '17 ~ Feb 26, '17 |
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Section 1: Price Directions Feb 20, '17 ~ Feb 26, '17 |
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Section 1 : Palm Oil Price Fundamentals Aug 22, '16 ~ Aug 28, '16 |
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Section 2 : Trade Issues and Market Prospects Aug 22, '16 ~ Aug 28, '16 |
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2016 Market Direction - Twists and Turns of Palm Oil Prices Feb 22, '16 ~ Feb 29, '16 |
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Second Half 2015 - Anticipating Market Price Direction Aug 17, '15 ~ Aug 23, '15 |
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Special Focus: Indian Sub-Continent Aug 17, '15 ~ Aug 23, '15 |
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Opportunities, Challenges And Trend In 2015 CPO Price Feb 23, '15 ~ Mar 01, '15 |
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2nd Half 2014: Market Challenges, Predictions And Directions Aug 25, '14 ~ Aug 31, '14 |
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Anticipating 2014 Palm Oil Price Direction Feb 17, '14 ~ Feb 24, '14 |
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Prospects For Second Half Of 2013 - Managing Price Fluctuations Jul 22, '13 ~ Jul 29, '13 |
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Mapping The Palm Oil Price - 2013 Market Perspective Feb 18, '13 ~ Feb 27, '13 |
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Palm Oil : Challenges, Opportunities And Latest Market Directions Aug 06, '12 ~ Aug 17, '12 |
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2012 Price Direction, Issues & Challenges Feb 13, '12 ~ Feb 20, '12 |
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Challenges, Opportunities And Latest Price Trend Aug 08, '11 ~ Aug 16, '11 |
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Challenges, Opportunities And Price Direction Feb 07, '11 ~ Feb 17, '11 |
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2010 Year End Prospects - What Lies Ahead? Aug 02, '10 ~ Aug 08, '10 |
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Clarification- my prediction that prices may go to RM 2800 on the back of supply tightness due to the prolonnged and lingering effect of the super El Nino. La Nina yet to be confirmed if it happen may influence 2017 prices thtough its impact on soybean production. Palm oil prices are related to crude oil in a band. Our price forecast are based on the assumption that bco will stay within the band of US 40-50/barrel. If it fall below USD 40, then prices will below lower to a lower band.
7 years ago
La Nina usually bring above average or prolonged high rainfall which not only affect harvesting and logistics but also pollination and fruitsets, therefore affecting OER and oil yield some 6 months later. However, the effects are short-lived and not very sugnicant on an annual basis. Historically, above average rainfall during La Nina generally assist in yield recovery after an El Nino event.
7 years ago
La Nina usually bring above average or prolonged high rainfall which not only affect harvesting and logistics but also pollination and fruitsets, therefore affecting OER and oil yield some 6 months later. However, the effects are short-lived and not very sugnicant on an annual basis. Historically, above average rainfall during La Nina generally assist in yield recovery after an El Nino event.
7 years ago