Not all commodities will ride the wave of recovery into 2017; palm oil prices are set to buck the trend.
The impending downturn will come after a strong rally recently due to the delayed impact of the El Nino weather phenomenon on harvests in South East Asia.
Palm oil prices on the Bursa Malaysia Derivatives exchange are currently trading around 2,600 ringgit ($644) per metric ton, up 10 percent from June as crop yields were slashed by the unusually dry weather caused by El Nino from January to April.
But the rally is not be sustainable, with prices to "ease significantly" in the coming quarters, BMI Research said in a note on Tuesday, as El Nino switches to La Nina, bringing rains that will likely boost production.
"Palm oil will be the only commodity within the agricultural complex and (the few) within the broader commodities complex to average lower on a year-on-year basis in 2017," BMI Research added.
The raw material is used in a wide variety of products from detergents to chocolates and cookies.
BMI Research predicted palm oil prices would average 2,350 ringgit a ton in 2017, against 2,500 ringgit a ton in 2016 and 2,235 ringgit a ton in 2015.