Palm Oil Prices Could Stay Firm as El Nino Risks Grow — Market Talk

Crude palm oil prices are expected to remain supported at current levels despite geopolitical risks, with further upside possible if the developing El Nino strengthens, RHB IB analyst Hoe Lee Leng says in a note. The U.S. National Oceanic and Atmospheric Administration issued an El Nino advisory and projected a high probability of a strong event by late 2026, she notes. Historically, strong El Nino has reduced palm oil yields and lifted CPO prices. Additional support could come from Indonesia's tighter export governance framework, which may constrain supply and raise compliance costs for exporters, she adds. RHB upgrades the Southeast Asian plantation sector's rating to overweight from neutral, pegging Johor Plantations, Sarawak Oil Palms, IOI Corp., Hap Seng Plantations, London Sumatra Indonesia and SD Guthrie as its top picks. (yingxian.wong@wsj.com)