CPO inventory levels in Malaysia remain below the two-million-tonne psychological level (1.46 million tonnes at end-August), while exports are strengthening due to the upcoming Deepavali and year-end festive season. This is likely to result in global CPO output in 2016 falling about 4.7% y-o-y. For 2017, barring all unforeseen weather extremities, CPO output is projected to recover by 8.7% y-o-y. The threat of La Niña has declined considerably to 55% (to occur in 4Q) versus 76% in 3Q. Some climate models indicate that a late and weak La Niña is possible.

Source: The Edge Markets October 06, 2016 03:00 UTC