Dried Fruit

Desiccated coconuts: buyers tend to panic buy

September 25, 2024 at 4:44 PM , Der AUDITOR
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MANILA/JAKARTA. Torrential rains and flooding in the major coconut-growing countries continue to be a problem in the international coconut market. Dwindling stocks in the western spot markets are causing buyers to panic buy.

La Niña could rage until February 2025

The Philippines are already reeling from the effects of tropical storm Yagi and the weather phenomenon La Niña has also left its mark. Floods and mudslides have damaged coconut plantations and oil factories, further straining the already tight supply situation, according to the experts from JCP International in their latest report. Further severe storms are expected until the end of the year. The World Meteorological Organisation has already warned that the effects of La Niña could extend into February 2025.

In other parts of Asia, too, torrential rainfall is causing flooding in many regions, including northern and southern Thailand and Vietnam. In contrast, the situation in Indonesia is not quite as serious, although heavy rainfall is also affecting the coconut crop here. After El Niño previously caused lower coconut yields, La Niña is now bringing immense amounts of water with it and coconut processors are fighting over the low stocks in order to keep their business going.

Prices could reach record high

Due to these circumstances, coconut oil prices are continuing to rise, currently trading at USD 1,750/mt in Rotterdam and market players are reckoning that prices could even exceed the EUR 1,800/mt mark. There is even speculation that high demand and limited availability could push prices up to a record level of USD 2,200/mt. As expected, prices for desiccated coconuts are following a similar trend. According to the experts at JCP International, buyers who have not hedged in advance with contracts are now panic buying. Further price rises are also to be expected here. Stocks are already running low in the important buyer markets such as Europe, the Middle East and North America, which is making prompt procurement more difficult. Freight rates have recently fallen again somewhat, but market players do not consider this to be a permanent trend. The ongoing conflicts in the Middle East could quickly lead to a turnaround.

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