The global desiccated coconut industry is currently facing concerns regarding the production of desiccated coconut in the Philippines. The extended dry season is impacting the average yield, causing significant worries according to trading sources.
Impact of Dry Weather on Production
The prolonged dry season has hit coconut plantations hard, leading to reduced yields. Despite moderate and heavy rains caused by Typhoon Aghon in the week ending 1st June, the rainfall has not been sufficient to recover the average yield levels. This situation is exacerbated by the increasing sea shipping fares due to congestion in Chinese ports, further impacting the supply chain and raising international prices.
Government Response and Budget Allocation
In response to the situation, the Philippine government is revising its farming budget to support coconut farmers. The plan includes planting around 100 million new coconut trees and allocating approximately 2.5 billion pesos (equivalent to $42.6 million) for securing fertilizers. This initiative aims to mitigate the effects of the dry season and boost production in the coming years.
Market Trends and Export Data
Despite the current challenges, the Philippines and Indonesia have shown an increase in desiccated coconut exports at the start of 2024. Philippine desiccated coconut exports reached 27,270 metric tons, valued at $38.8 million, during January-February 2024. This represents a 35% increase in value and an 11% increase in volume year-on-year.
Rising Demand and Price Increases
The rising demand for desiccated coconut, coupled with supply constraints, is leading to price increases. Driers and beverage manufacturers are working hard to secure their supply, and price adjustments are anticipated in the second half of 2024.
Conclusion
The desiccated coconut industry is navigating through a challenging period due to weather conditions and logistical issues. However, with government support and strategic planning, there is hope for stabilization in the future. We will continue to monitor the situation and provide updates as new information becomes available.
For more detailed insights and updates on the desiccated coconut market, stay tuned to our Market Updates. We welcome your comments and inquiries.
Source: IHS Markit