Coconut Market Update!
Indonesia is beginning to have supply issues. The demand for nuts in the area has risen, and supply isn't keeping up. There have been some reports of minor delays, but nothing as catastrophic as it is in the Philippines.
The major issue for Philippine DC makers is still production delays. The majority of producers are still 4 to 6 weeks behind schedule and are just getting back on track. This is also placing a lot of pressure on DC supply in Europe.
We are hoping that the regular typhoon season (Q3) would not add to the market's already difficult supply issues. Raw nut prices appear to have reached their peak in April and are now levelling off.
The number of sellers is still limited, so it appears that it is better to cover than to wait.
Prices in Sri Lanka have dropped dramatically in recent days. The drop in prices was sparked by a drop in the price of coconut oil in the local market. Large volumes of coconut oil were imported into Sri Lanka in recent weeks, resulting in a coconut oil overstock problem. Importers are now forced to sell their stocks for less than they paid for them. The ease of the coconut oil market resulted in reduced fresh coconut prices, which, in turn, resulted in lower DC costs. We've also witnessed an uptick in coconut harvests.
And, of course, the daily effort to book vessels, containers, and obtain a reasonable freight cost continues for all origins. As a result, "FOB" offerings have become the new standard, and there will be no relief on cheaper freight this year. Some even predict even higher freight charges as a result of increased global logistic activity.