Dessicated coconuts: typhoon season may spell disaster

July 5, 2021 at 11:31 AM , Der AUDITOR
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MANILA/COLOMBO. Delivery and production delays are still rampant in the coconut producing countries in the Pacific. They are also causing the supply squeeze in Europe to get worse. Much will, in addition, depend on the approaching typhoon season. Spot market prices have, however, taken a surprising turn in Europe.

Typhoon season in third quarter

As Chelmer Foods reports coconut supplies are expected to become an issue in Indonesia. While demand is on the rise for coconut products in the country, supplies cannot keep up. Delays are now being reported. The situation is, however, not quite as bad as in the Philippines where shipments are four to six weeks behind schedule. Delays are expected to continue until the end of the year. The impact of the typhoon season will also prove decisive in the third quarter.

Nominal decline in prices

Raw material prices are said to have peaked in the Philippines in April and are currently levelling off. Issue, however, is that supplies are still cut short. This is prompting a more sustained supply squeeze in Europe as warehouses are nearly empty and there is no improvement in sight. Spot market prices in Europe have, nevertheless, declined nominally. Fine medium fat desiccated coconuts are trading at EUR 1.85/kg FCA Spain.

Desiccated coconuts

Quality, producing country

EUR/kg

Fine, low fat, Indonesia

1.36

Fine, medium fat, Indonesia

1.85

Fine, high fat, Sri Lanka

2.75

Organic, fine, high fat, Sri Lanka

2.85

FCA Spain

Excess coconut oil supplies in Sri Lanka

As the prices for coconut oil have tumbled in Sri Lanka's domestic market other coconut related products are trading lower. Issue is that large volumes of coconut oil were imported in May and in June, which has now left the country confronted with excess inventories. Suppliers are forced to sell at lower prices at a loss. Fresh and desiccated coconuts are, therefore, trading lower. Market players also anticipate a rise in production. The lack of containers, however, remains a problem as freight charges are still extremely high.

 

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