Palm oil and coffee prices set to rise

Dry weather: The El-Nino phenomenon is likely to hurt cocoa crops in Ivory Coast, Ghana and Nigeria, while rubber prices may remain weak in the near term. — Reuters

KUALA LUMPUR: Palm oil and coffee prices are poised to climb as crops from Asia to Latin America suffer from the strongest El Nino in almost two decades, according to Singapore commodity trader Olam International Ltd.

Palm oil inventories will further shrink in the second quarter as about 1.5 million tonnes to 2 million tonnes of production is lost to El Nino-induced dry weather, chief executive officer Sunny Verghese told reporters in Singapore yesterday. Stockpiles in Malaysia, the largest producer after Indonesia, dropped to a six-month low in January, according to the Malaysian Palm Oil Board.