El Niño Fears Boost Palm Oil Prices Amid Supply Concerns

Palm oil futures rose on concerns over El Niño's potential impact on production in Malaysia and Indonesia. The November contract on Bursa Malaysia gained 0.55% to 4,931 ringgit ($1,220)/t on September 4, and 0.76% for the week.

Market participants fear that weather conditions associated with El Niño could harm production in the world's two largest producers. This led to expectations of a potential reduction in palm oil supply in the medium term, supporting prices.

However, lower crude oil prices put pressure on palm oil. Cheaper crude makes palm oil less attractive as a biodiesel feedstock, although concerns over energy supplies in the Middle East continue to support the crude oil market.