Coconut Market Report 18.01.24

There are shortages in raw material supply due to poor weather persisting across producing regions, made worse by El Nino in 2023.

While supply may be dwindling, demand has sky-rocketed. This is because:

• Massive seasonal demand from the Middle East and North Africa for Ramadan
• Large sell off in 2023 of massive carry over stock from 2022, which reduced overall inventory at destination markets.
• Buyers are now realising that the bottom inthe market was in and are now rushing to cover goods purchases as far as they can go. Some are even purchasing up to December 2024.
• People buying extra quantities to mitigate against shipment delays that are occurring as a result of the conflict in the Red Sea and the redirection of vessels via the Cape of Good Hope. This has increased transit time by as much as 4 weeks from Asia into Europe.

In addition to the surge in costs of raw nuts, shippers and importers are having to contend with a surge in freight rates particularly on the Asia to Europe/ North Africa routes where we are seeing freights in some cases quadruple overnight. The conflict in the Red Sea does not seem to have an end in sight and it would seem that we may have to contend with higher freights for some time. As a result, many shippers are now switching sales to FOB terms.

Most mills in the Philippines are sold out and only offering April/May shipment onward. Mills in Indonesia are largely sold out till March and also look to sell April positions.

via Jascorp