AALI warns El Nino phenomenon will continue affecting palm oil production until 2027

The trace

How it reaches your house.

Starting from Wilmar International, we walked the supply graph hop by hop to the goods you buy and the companies you own. Each step is the engine’s reasoning, scored for confidence and cited where a source backs it.

1. First impact

   Sime Darby Plantation Berhad →Shortage risk

   Palm oil production

   Reuters reported that the former Sime Darby Plantation expects production to be hit in 2027-2028 as El Niño brings drier, hotter weather, so the company's palm oil output is likely to fall as the shock persists.

   “it expected production to be impacted in 2027 and 2028 with El Niño set to bring drier and hotter weather.”

   93% confidenceCited →

   Sime Darby Plantation →Shortage risk

   RBD Palm Oil (Confectionery & Bakery Fat)

   El Niño is expected to cut Sime Darby Plantation/SD Guthrie production in 2027-28, and this company supplies 8% of this RBD palm oil input, so available supply should tighten modestly despite partial substitutability.

   82% confidence

   Wilmar International →Prices rise

2. Hop 2

   Palm fresh fruit bunches (FFB) →Shortage risk

   Cooking oils

   Palm fresh fruit bunches are a critical input to cooking oils, so a persistent FFB output decline keeps edible-oil supply tight.

   95% confidence

   Palm fresh fruit bunches (FFB) →Shortage risk

   Indonesia

   Indonesia supplies 59% of the input, so sustained El Niño stress there materially reduces available palm output.

   90% confidence

   Palm fresh fruit bunches (FFB) →Shortage risk

   Malaysia

   Malaysia's 26% share means the same weather shock still leaves a sizable hole in supply.

3. Hop 3

   Indonesia →Shortage risk

   RBD Palm Oil (Confectionery & Bakery Fat)

   El Niño-related production losses in Indonesia directly tighten the country's 59.6% supply share of RBD palm oil.

   96% confidence

   Malaysia →Shortage risk

   Palm fresh fruit bunches (FFB)

   Persistent El Nino stress in Malaysia directly cuts supply of fresh fruit bunches, a major Malaysian-sourced palm input (26% share).

   96% confidence

   Indonesia →Shortage risk

   Palm fresh fruit bunches (FFB)

   Indonesia supplies 59% of palm fresh fruit bunches, so reduced palm output here becomes a direct FFB shortage.

4. Hop 4

   Vegetable Oil Blend (Palm Olein, Soy, Coconut, Sunflower) →Shortage risk

   Infant formula

   Infant formula is marked as a critical downstream input user, so a persistent vegetable oil blend shortfall should directly constrain production.

   91% confidence

   Vegetable Oil Blend (Palm Olein, Soy, Coconut, Sunflower) →Prices rise

   AAK AB

   AAK's 22% share and only moderate substitutability mean the blend shortage is likely to raise its feedstock costs.

   82% confidence

   Vegetable Oil Blend (Palm Olein, Soy, Coconut, Sunflower) →Prices rise

   Wilmar International Limited