UBS points out that the next driving force for agricultural products may no longer be solely changes in demand, but rather a resurgence of weather risks. The report cites forecasts stating that
the current El Niño event has an 81% probability of developing into an "extremely strong" or "super strong" level by the end of this year, and a 97% probability of continuing into next year.
This means that if El Niño continues to strengthen, some agricultural regions globally may face more pronounced abnormal rainfall, droughts, or temperature fluctuations, thereby increasing uncertainty on the supply side of agricultural products. Based on this, UBS believes that agricultural commodities have potential for future price increases, with the core logic shifting from stronger consumption to weather factors once again dominating the supply-demand balance.