{
  "id": 9477744,
  "title": "El Nino lagging supply impact underpins positive outlook for plantation sector – MBSB Research",
  "url": "https://urgent.news/2026/09/24/el-nino-lagging-supply-impact-underpins-positive-outlook-for",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-24T03:00:37.000Z",
  "source": {
    "name": "New Straits Times",
    "slug": "new-straits-times",
    "url": "https://www.nst.com.my/business/corporate/2026/09/1539893/el-nino-lagging-supply-impact-underpins-positive-outlook"
  },
  "original_language": "en",
  "account": "Despite a sweltering climate and accompanying haze casting a shadow over many oil palm plantations across Peninsular Malaysia, Sabah, and Sarawak, palm oil production yields are presenting an uneven distribution due to the weather's influence. During the first eight months of 2026 (8M26), Malaysian estates averaged a fresh fruit bunch (FFB) yield of 10.83 tonnes per hectare, marking a minor 1.5 percent year-on-year (YoY) decline from the 11.00 tonnes per hectare recorded in 8M25. The regional differences were stark, with Peninsular Malaysia witnessing a 7.8 percent YoY drop, bringing yields down to 11.29 tonnes per hectare. Conversely, Sabah and Sarawak saw a 5.8 percent YoY boost, lifting their yields to 10.48 tonnes per hectare from 9.98 tonnes per hectare.\n\nWhile this regional disparity suggests regional resilience, experts caution that persistent moisture stress might severely hamper subsequent bunch production. There's a lag between rainfall patterns and actual yield, which could lead to weaker overall yields and tighter crude palm oil (CPO) availability by the end of 2027. This delayed response to the El Nino weather event supports MBSB Research's positive outlook on the plantation sector. The US National Oceanic and Atmospheric Administration (NOAA) estimates a 93 percent chance of a very strong El Nino event between November 2026 and January 2027, and a 75 percent likelihood during December 2026 and February 2027. This extended window heightens the urgency to closely monitor rainfall and plantation yields.\n\nEven though the national yield decline for 8M26 remains limited to 1.5 percent, the persistent dry spell in August and a rise in elevated hotspots strengthen the case for tighter future supply. If harvests continue to suffer under these climate pressures, reduced FFB production could tighten global palm oil availability, potentially supporting CPO prices throughout CY27. Therefore, keeping exposure to the plantation sector, especially focusing on upstream planters with greater direct ties to Malaysian estates, appears to be a prudent strategy. Borneo-based companies such as Ta Ann Holdings Bhd and Sarawak Plantation Bhd are recommended as top picks due to their stronger upstream exposure and strong Malaysia-centric focus, making them less vulnerable to El Nino-related disruptions. Among the large-cap players, SD Guthrie Bhd stands out, backed by its robust Malaysian presence, which accounts for around 54 percent of its total FFB production.",
  "summary": "KUALA LUMPUR: Despite the hot weather and the subsequent haze impacting much of the oil palm growing regions of the Peninsular Malaysia and Sabah and Sarawak, palm oil yields are currently demonstrating an uneven supply impact, indicating that recent harvests have yet to reflect a weather-driven contraction.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 2,
    "also_reported_by": [
      {
        "outlet": "New Straits Times",
        "title": "Top dairy exporter Fonterra flags El Nino risks to milk supply",
        "url": "https://urgent.news/2026/09/24/top-dairy-exporter-fonterra-flags-el-nino-risks-to-milk-supply",
        "published": "2026-09-24T03:33:02.000Z"
      }
    ]
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}