Dried Fruit

Desiccated coconuts: unstable market situation

January 17, 2024 at 12:13 PM , Der AUDITOR
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MANILA/COLOMBO. Due to the uncertain market situation, some coconut processing factories in the most important growing countries remain closed for the time being. The situation in the Red Sea is also making export conditions considerably more difficult.

Factories extend break

As the experts from Chelmer Foods report, the coconut factories in the Philippines and Indonesia were closed as usual over the Christmas holidays. Some of them resumed operations at the beginning of January, but other producers decided to extend the break due to the uncertain market situation. There was also little trading activity on the markets during the festive period, but market experts forecast a more stable market in the coming months, which will be influenced by the effects of the drought in the growing regions in Q3 2023 - these are likely to be particularly noticeable in Q2 and Q3 2024.

High commodity prices in Sri Lanka

A similar situation can be seen in the desiccated coconut industry in Sri Lanka. According to Chelmer Foods, most factories here also stopped work in the third week of December and most of them have not yet resumed. Depending on the order situation, work will gradually resume here in the coming weeks; this also depends on the availability and prices of fresh coconuts. Prices had risen by 11% before the Christmas break.

Freight rates are skyrocketing

The situation in the Red Sea poses a major problem for deliveries to Europe, African countries and the USA, depending on the route. Major shipping companies, including Maersk, decided at the beginning of the year to route their ships past the Cape of Good Hope rather than through the Red Sea in order to avoid attacks by Houthi rebels. This is driving up freight rates considerably: Chelmer Foods reports USD 5,000 for a 40' FCL from Indonesia or the Philippines to Hamburg or Rotterdam. For this reason, all producers and exporters are currently only offering FOB terms.

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