“Our base case assumption is a moderate El Nino and a resolution or solution for the grains corridor issue before end-October, which is when the harvesting period for Russia and Ukraine’s sunflower crops ends.
RHB Bank Singapore analysts Hoe Lee Leng and Syahril Hanafiah are maintaining “neutral” on the plantation sector following Australian Bureau of Meteorology’s confirmation that El Nino is underway.
In their Oct 5 report, the analysts note that they do not expect crude palm oil (CPO) prices to move past RM4,000 ($1,304) per tonne mark for the rest of 2023. However, they believe CPO prices could range higher from the current levels to up to RM4,500 per tonne once the impact of El Nino starts to affect productivity in 2H2024.
