Dried Fruit

Desiccated coconuts: supply shortage causes prices to rise

February 7, 2024 at 12:22 PM , Der AUDITOR
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MANILA. The El Niño weather phenomenon has had a negative impact on yields in the coconut-growing countries, making raw materials on the coconut market scarce and expensive this year. The situation is exacerbated by long shipping times and high freight rates.

Buyers are stocking up early

In their latest report, the experts from JASCORP summarise the situation on the coconut market in 2023 and also venture an outlook for market development in the current year 2024. One important factor here is that raw materials are in short supply in almost all producing countries; the weather conditions have not played into the hands of growers and have been exacerbated by El Niño, so it was already expected that supply would be tighter in 2024. At the same time, global demand is increasing for various reasons. In Muslim countries, traders are stocking up in the run-up to Ramadan, and as the impending shortage of goods is known, suppliers worldwide are trying to get hold of goods in time to fulfil their orders. Some contracts have already been concluded for December 2024.

Some buyers are also stocking up on additional quantities to cushion the delivery delays caused by the crisis in the Red Sea and the resulting rerouting of ships. The transit time from Asia to Europe has been extended by up to four weeks as a result, and freight rates have also shot up significantly; in some cases they have quadrupled. There is no end in sight to the conflict, and as commodity prices for coconut products have also become more expensive, buyers have to be prepared for relatively high prices all year round. Suppliers have switched to submitting their offers on an FOB basis.

Price low has been overcome

JASCORP also reports that most mills in the Philippines are currently sold out and will not be offering supplies again until April or May. In Indonesia, too, there are often only positions for April again. Overall, the experts see a firm market in 2024, and the lows that the market for desiccated coconuts experienced in 2022 and 2023 are over for the time being. The supply situation in the countries of destination will worsen due to longer delivery times, while the raw material stocks will continue to decline. Buyers will continue to stock up as early as possible in order to prevent a supply shortage and rising prices.

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