COCONUT MARKET REPORT 18th April 2024

Last updated: 19 Apr 2024  |  68 Views  | 

COCONUT MARKET REPORT 18th April 2024

Dear Esteemed Partners,

I hope this message finds you well. I write to bring your attention to the significant challenges currently affecting the supply chain and pricing dynamics of agricultural commodities across Asia, particularly in the coconut industry.

The disruptive effects of El Niño have been particularly adverse, leading to severe shortages in raw coconut supplies from key origins such as the Indonesian archipelago, the Philippines, and Sri Lanka. This scarcity has created intense competition among stakeholders, with DC mills and coconut oil crushers vying for limited resources, resulting in unprecedented price hikes.

Regrettably, these supply constraints have rippled throughout the supply chain, causing substantial delays in shipments and production. We've observed heavy delays attributed to both raw material shortages and price inequities, with factories prioritizing shipments for contracts that have undergone renegotiation.

Moreover, recent geopolitical tensions, notably in the Middle East, have further compounded our challenges. Instances of ships diverting from the Red Sea to the Cape of Good Hope have caused additional delays in the arrival of goods, exacerbating inventory shortages in destination markets. Given the uncertainty surrounding the geopolitical landscape, particularly in the Persian Gulf, we anticipate potential disruptions to sea routes, which could further impact freight rates and supply chain logistics.

Additionally, it's imperative to closely monitor developments in the petroleum market, especially considering recent geopolitical escalations. The potential for conflict in key oil-producing regions, such as Iran, poses a significant risk to crude oil prices, consequently influencing freight rates and the viability of alternative energy sources like biofuels derived from edible oils such as palm and coconut.

Looking ahead, as we approach the traditionally high-demand periods of Q3 and Q4, it's prudent to anticipate further price escalations and supply challenges. Therefore, we strongly advise forecasting your purchases in advance to mitigate potential risks and disruptions.

Please do not hesitate to reach out to us for any assistance or information on navigating these complex market conditions effectively. Your partnership and continued support are invaluable to us as we navigate these challenges together.

Best regards,

 

PANTHEON INGREDIENTS LLC


THE INFORMATION PROVIDED IN THIS REPORT IS AN EXPRESSION OF OUR CONSIDERED OPINION AND IS FOR INFORMATIONAL PURPOSES ONLY. TRADING AGRICULTURAL COMMODITIES INVOLVES RISKS AND READERS SHOULD DO THEIR OWN RESEARCH BEFORE MAKING A PURCHASE DECISION.

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