Desiccated Coconut Market Update

After a period of slow demand, origins in Indonesia and the Philippines are experiencing a resurgence of demand from various markets. This renewed demand has led to mills in Indonesia being mostly sold out for June positions, with July positions also expected to be sold out soon. Similarly, mills in the Philippines are close to selling out July positions and looking to sell August positions onwards. The increased demand and limited availability of supply have resulted in price increases in May, with Indonesia experiencing an approximate monthly increase of USD 150 to USD 200 per metric ton.

A similar situation is observed in the Philippines, where mills are close to selling out July positions and looking to sell August positions onwards.

Importers worldwide have faced challenges in selling high-priced inventory with expensive freight charges. However, major markets have started to see movement in inventory, and importers are now replenishing stock at current prices and more reasonable freight rates.

Nevertheless, there are challenges on the horizon. Asia is experiencing hot and dry temperatures that are unfavorable for crop growth and make harvesting difficult. The El Nino weather pattern is expected to occur in July, further impacting cash crops and reducing output. Oil seeds such as Palm Oil and Coconut will be affected.

Looking ahead, there is significant unfulfilled demand in the markets that will need to be covered in the coming quarters. Large manufacturers are already making inquiries for positions into 2024, anticipating price increases from the current low end of the spectrum. However, with the potential negative impact of El Nino on crop output, prices may rise even higher due to the demand-supply imbalance.

Given the historical impact of previous El Nino events, it is advisable to plan purchase requirements well in advance to secure favorable prices and ensure a stable supply when needed.