Huatai Securities Warns El Niño in 2026 May Disrupt Sugar, Rubber, and Palm Oil Supply

According to Huatai Securities, global weather authorities are predicting El Niño will strike in 2026, triggering extreme regional weather patterns that could disrupt major agricultural commodity supplies. The bank expects global sugar supply to shift from oversupply to modest shortage due to droughts in India and Thailand, export restrictions, and Brazil's energy substitution trends, supporting higher sugar prices. Extreme drought conditions could directly impact palm oil and natural rubber supply chains, which heavily depend on Southeast Asian production regions. Historical analysis shows both commodities have exhibited strong upside price elasticity during strong El Niño cycles.
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