PALM oil prices have been rising, and for growers that can feel, at first glance, like an unexpected blessing.
Few things warm a planter’s heart faster than a futures chart pointing north.
Traders have been bidding prices upward as tensions in the Middle East unsettle trade routes and energy markets – a deeply saddening situation, and one can only pray that peace will prevail soon.
When crude oil jumps, vegetable oils usually follow.
Biodiesel economics begin to smile, freight costs twitch, and palm oil suddenly finds itself back at the commodity party.
Yet, this rally is not driven by geopolitics alone.
CIMB notes that Malaysian palm oil stocks fell 3.9% month-on-month (m-o-m) to 2.704 million tonnes in February and could slip another 8% to 2.479 million tonnes in March, even as crude palm oil (CPO) prices have risen 9.5% since Feb 27 to RM4,428 a tonne.
In other words, the market is reacting not just to conflict but also to tighter stocks, firmer exports and stronger biodiesel economics – enough to make prices look muscular even before El Nino has cleared his throat.
For planters, higher prices can feel like a small vindication.
Years of discourse on sustainability, certification fatigue, labour shortages and regulatory gymnastics briefly fade when the market remembers that food – and the oils that cook it – do not grow on spreadsheets.
But blessings in agriculture usually come with a footnote.
While markets celebrate price rallies, nature is quietly editing the script. War can rattle trade routes. Energy prices can tighten supply chains.
Yet there is another force, older and far less negotiable, that may yet join the performance: the climatic showman, El Nino.
El Nino climatic showdown in 2026?
Climate watchers are again casting careful glances across the Pacific.
The World Meteorological Organisation notes that weak La Nina conditions seen in early 2026 are fading, with the climate system likely shifting into El Nino–Southern Oscillation (Enso)-neutral territory in the coming months.
From there, the odds of El Nino returning later in the year are rising, with some forecasts placing the probability at around 50% to 60% by the second half of financial year 2026.
Some models even hint at a particularly strong episode. Should that occur, global temperatures could climb again, potentially pushing 2026 or 2027 into the ranks of the hottest years ever recorded.
Forecasting El Nino is never straightforward. Nature still enjoys keeping meteorologists humble. Yet, the direction of travel is becoming clearer.
The Pacific may once again be warming its engines, and when El Nino stirs, agriculture across the world tends to feel the tremor.
The market is already edgy even before the weather drama begins.
CIMB expects March production to recover by 12% m-o-m, but exports to rise even faster, by 25%, more than offsetting the increase and pulling stocks lower still.
In other words, inventories are tightening just as the Pacific begins clearing its throat.
Think of El Nino as climate’s rogue conductor. With a subtle shift of warm Pacific waters, it rewrites the world’s weather score.
Rain arrives where it shouldn’t.
Drought settles where rain is owed. Seasons forget their cues. Farmers relearn humility.
From wheat fields to rice paddies, maize belts to cocoa groves, El Nino has a talent for turning abundance into anxiety.
Crops wilt. Yields shrink.
Harvest calendars unravel, and what begins as a weather anomaly can escalate into production losses, food shortages and price spikes.
Oil palm is no exception. When El Nino tightens the rainfall tap, palms do not merely look stressed – they remember it.
Yields fall not only in the drought year but also months and even years later, quietly compounding the damage.
So if palm oil prices are already rising on the back of conflict, tighter stocks and stronger biodiesel economics, one cannot help but wonder: what happens if El Nino chooses this moment to appear?
That is where the real story begins.
Because if I were El Nino, I certainly wouldn’t arrive quietly.
If I were El Nino...
If I were El Nino, I wouldn’t arrive quietly. I never do. I sweep in like an uninvited party crasher.
One moment the weather behaves itself; the next, I seize the microphone and push sensible patterns offstage. Meteorologists sense me before they see me.
Charts multiply. Acronyms bloom –Enso this, Oceanic Nino Index that – while farmers scan the sky with the quiet unease of people who suspect trouble is coming.
Think of me as nature’s most unpredictable DJ.
I don’t take requests. I remix.
Rain drops out, heat stretches its solo, and drought lands like bass travelling across oceans until South-East Asia feels the tremor.
And while my oceanic dancefloor steals the headlines, another performance is underway in oil palm estates – a slower botanical opera of timing, balance and trust.
That is where I truly belong: not merely as weather, but as a climatic diva stepping onto the plantation stage, knowing that once I appear, the consequences linger long after the applause fades.
A botanical love story (until I interrupt it)
Before I arrive, the oil palm stages one of agriculture’s most under-appreciated operas.
This is not brute-force farming. This is choreography.
Male and female flowers perform a carefully timed tango.
Tiny Elaeidobius weevils – unsung romantics in pollen-dusted suits – play Cupid, darting between inflorescences with devotion that would impress any matchmaker.
When everything works, the finale is a lush crescendo of fruit bunches that quietly feed the world.
Nature’s tropical grand opera – elegant, intricate and dependent on rhythm.
And then... I crash the stage.
When the heat arrives: The thirst games
When I show up, harmony tightens into tension. Rainfall hesitates.
The sun overstays its welcome. Soil cracks its knuckles.
Oil palms – glossy prima donnas of the tropics – suddenly face a high-stakes drama where survival and future yields hang in the balance.
Oil palms are not casual drinkers.
A mature palm can consume up to 400 litres of water a day – roughly the equivalent of a generous five millimetre tropical rainfall.
When rain comes, fronds gleam and bunches swell.
But when the skies fall silent? Cue the drama.
The palm is a giant green sponge engineered to convert water into growth, flowers and fruit.
Remove that water and the entire production system falters.
Oil palms are finely tuned reproductive machines.
Their yields depend on balance – a choreography between male and female flowers mapped months, sometimes years, before a bunch reaches the ground.
When drought strikes, that balance slips.
The salsa becomes a shuffle.
Timing falters.
Confidence wavers.
And stress, as every plantation manager knows, has a long memory.
When the flowers lose the plot
Under drought stress, the palm begins favouring male inflorescences – plentiful but unproductive.
Female flowers – the true stars of fruit formation – hesitate or quietly abort before their cue arrives.
The damage appears slowly. Five or six months later, bunches begin to falter.
A year later, female inflorescences withdraw.
Nearly two years on, the final echo emerges: a persistent bias toward male flowers.
Plenty of display. Little substance.
Bunch counts fall. Projections darken.
The shadow of that forgotten drought stretches into seasons that were meant to be better.
Stress in oil palms does not shout. It remembers.
Risk Management and the Palm’s Long Memory
Producing female flowers and filling bunches is expensive. It demands water, nutrients and energy.
Under stress, the palm hedges its bets. Male flowers are cheaper and biologically safer. It is not laziness.
It is plant physiology and plantation risk management.
Like a factory running on failing machinery, the palm cuts output simply to stay alive.
The result: fewer bunches, smaller harvests and a yield dip no fertiliser programme can magically reverse. Stress, once imposed, stays on the books.
Oil palms, like people, respond differently with age. Young palms under ten behave like adolescents – full of potential but volatile.
Between 10 and 20 they find their rhythm.
Beyond 20 they settle into quieter dignity as yields stabilise and slowly decline.
So when El Niño strikes, it never lands on blank slates. It lands on histories.
Theatre of heat
If I were El Niño, the scorching sun would be my tyrant king, parched lands my battlefield and the oil palm my tragic hero – valiant yet vulnerable, standing tall while suffering in silence.
Estate managers become reluctant generals, patrolling cracked landscapes with fire beaters, water trucks and hopeful glances at cloudless skies.
Millers stare into shrinking ponds as if appealing to the heavens: “Just one good downpour, please.”
Yet the drama need not end in tragedy. Vigilance becomes the planter’s ally: conserving soil moisture, strengthening fire patrols, managing nutrients carefully and watching climate signals closely.
In the theatre of tropical agriculture, surviving El Niño is not merely endurance.
It is adaptation, risk management, investment and sometimes positioning wisely in volatile markets. Resilience, after all, has always been agriculture’s quiet superpower.
Palm Oil and the Great Game of “Ifs”
If I were El Niño – and if I appeared this year – the palm oil world would once again face a puzzle of many “ifs”.
If El Niño tightens the rainfall tap, yields may stumble into 2027 or even 2028.
If yields stumble, prices may climb.
But if prices climb, another set of “ifs” enters the conversation.
If geopolitical tensions in the Middle East continue to rattle energy markets, crude oil may rise – and with it the biodiesel equation.
If Indonesia presses ahead with B50 biofuel ambitions, palm oil demand could tighten further.
But not all bullish-looking “ifs” stay bullish.
CIMB warns that the same energy spike lifting CPO can also lift fertiliser costs, while prolonged high oil prices may weaken global growth and soften palm oil demand.
In plantation language, the selling price may smile while the cost line quietly sharpens its knife.
If fertiliser supplies tighten through geopolitics or shipping disruptions, input costs climb.
And if costs rise while yields wobble, margins behave like a shy animal – visible from afar, but difficult to capture.
Suddenly, the plantation ledger becomes a crossword puzzle of economics, agronomy and geopolitics.
Many of these “ifs” are powerful, though not all are equal.
Some will weigh more heavily than others, and the real drama lies in their interplay – how one “if” amplifies another, softens it, or sends the whole equation off script.
Most lie far beyond the control of the humble planters.
So analysts will polish their models to measure the force of each variable and the mischief of their interaction. Traders will consult their charts.
And the industry will once again peer into the familiar crystal ball of price forecasts.
But the real question is not what price appears on the board.
A higher CPO price is welcome, of course, but it never arrives alone. Freight, fertiliser, energy and demand all want their share.
The real test is what margin survives the storm of “ifs”.
Because in plantation life, prices may impress the market – but margins measure the planter.
Price makes the headline. Margin writes the verdict.
Joseph Tek Choon Yee has over 30 years of experience in the plantation industry, with a strong background in oil palm research and development, C-suite leadership and industry advocacy. The views expressed here are the writer’s own.
