Desiccated Coconut market update 09.01.24
Most coconut factories in Indonesia and The Philippines have been closed during the Christmas holidays. Some are reopening this week, however, some producers are remaining closed for the time being due to the uncertainty of the market.
Regarding the local Desiccated Coconut market in Indonesia and The Philippines, there have been minimal changes. The holiday season was relatively quiet, and any notable changes are not apparent. As previously mentioned, we anticipate a more stable market in the upcoming months, influenced by the impact of the drought experienced in Q3 of 2023 which is expected to be felt in Q2/Q3 of this year.
We're all aware of the challenges faced by vessel transport in the Suez Canal. Major shipping companies, including Maersk, have opted to reroute their vessels away from the Red Sea through Africa's Cape of Good Hope. Consequently, the freight rates for 40ft containers from ports in Indonesia and The Philippines to Hamburg/Rotterdam have surged to approximately $5,000 USD. Because of this, all producers and exporters are now exclusively offering terms on a FOB basis.
Similarly, the DC market in Sri Lanka is currently stagnant. The majority of mills ceased production in the third week of December and have not resumed operations. Some mills are anticipated to start productions again in the upcoming weeks, while others will restart later, contingent upon the availability and prices of fresh coconuts. Prior to the holiday closure and annual maintenance, fresh coconut prices experienced an approximate 11% increase. This price hike is expected to influence DC prices when mills recommence production.