El Niño disruption causes palm kernel prices to double
Palm kernel oil prices have almost doubled in the last year to their highest levels in over five years due to the impact of the El Niño weather phenomenon in the Pacific ocean, which slashed availability throughout the 2015-16 season.
Prices grew by 30% in the last quarter of 2016 alone due to short supplies. Such shortages are expected until the second half of the current season in 2017, predicted Mintec, a commodities analyst
Production throughout the year fell 3% 7.1m tonnes, breaking the steady growth trend of previous years.
Exports from major producers Indonesia and Malaysia over the first nine months of 2016 were down 12% year on year at 1.9m tonnes, leading to the initial price increases.
Global production for the coming year is forecast to recover 7% to 7.6m tonnes, though Mintec said the majority of this growth will not be realised until later in 2017.