El Nino effects on vegetable oil prices

El Nino, the Pacific Ocean stream, is likely to hit the Philippines’ coconut trees, bringing the yield down by about 25 to 50%. As a result, the coconut production, which was planned for 2002 at 1,9-2,3 million tonnes, is to be re-defined due to the dryness conditions caused by El Nino. Drier-than-average conditions have also been observed over Indonesia during last month. Should El Nino effects be confirmed, prices for vegetable oils may therefore increase sharply with a subsequent possible impact on fatty acid and glycerine prices.