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CICC: El Niño and Geopolitical Factors May Strengthen Global Agricultural Prices
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A research report from CICC (China International Capital Corporation) analyzes that historical data since 1960 indicates strong and very strong El Niño events have likely led to reduced global corn and palm oil production, while soybean output may increase. The report states that the fundamental supply-demand balance for global agricultural products is currently shifting from loose to tight equilibrium. This trend is further amplified by restricted shipping through the Strait of Hormuz, which drives up oil prices, planting costs, and demand for biofuel substitutes, as well as disruptions to grain exports from the Black Sea region. CICC concludes that the convergence of supply-demand dynamics, geopolitical factors, and weather conditions is catalyzing stronger price trends for agricultural commodities.
Source report
A research report from CICC (HK3908) notes that a review of historical data since 1960 indicates that strong and very strong El Niño events have likely led to reduced global corn and palm oil production, while soybean output may increase.
Currently, the fundamental supply-demand balance for global agricultural products is shifting from a loose to a tight equilibrium. This trend is further amplified by several factors:
- Restricted shipping through the Strait of Hormuz, which drives up oil prices, planting costs, and demand for biofuel substitutes
- Disruptions to grain exports from the Black Sea region
The convergence of supply-demand dynamics, geopolitical factors, and weather conditions is catalyzing stronger price trends.
Source
同花顺财经Eastern
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CICC warns super El Niño and geopolitical risks may drive global crop prices higher