MARKET REVIEW OF DESSICATED COCONUT

June 2020

Price of desiccated coconut (DC, FOB US) in May 2020 was 29% higher as opposed to last year’s price. The price was relatively strong and stable in the first half of 2020 amid global economic uncertainty due to COVID-19 outbreak. Expected robust demand and lower production of the product are price supportive. The positive trend of the price started from the last quarter of 2019 when the price increased from USD1,628/MT in September to US$1,830/MT in December 2019 in the Philippines. Meanwhile, the rebound of DC price in Indonesia and Sri Lanka happened earlier. In Indonesia, the price started to increase in August 2019 when the price increased by US$15/MT and it was steadily improving to US$1,550/MT in December. Similarly, in Sri Lanka DC price regained to US$1,615/MT in August 2019 after reaching the lowest level in December 2012 at US$1,420/MT in July 2019.

Global demand on desiccated coconut (DC) from Philippines, the largest exporting country rocketed amid a low price of the product. In 2019, Philippine’s export of desiccated coconut (DC) showed an increasing trend following the positive trend in the last three years. The official figure from the Philippines Statistics Authority showed that the export of DC in the period of January-December 2019 was 162,388 MT which was 27% higher than previous year’s volume for the same period. The lower price of DC has given a room for importers to boost their orders to accumulate stocks. Meanwhile, an increase in coconut production made it possible for DC manufacturers to maximize their production capacity to fulfill an increasing demand. The increase in export of DC in 2019 was the fourth consecutive years for the Philippines. From 2016-2018 export of the product from Philippines rose by 36%, 26% and 11%.The positive trend is expected to prolong in 2020. In the first quarter of 2020,Philippines Statistics Authority reported that the export volume was 39,314 MT which was 29% higher than last year volume for the same period. In the first quarter of 2020, America and Europe were still major destinations for DC from the Philippines, accounting for more than 60% of the total export. USA was the main destination for Philippines DC. It absorbed 18%of the total export of DC from Philippines. Meanwhile Europe, Netherlands was the main hub receiving 7,069 MT of Philippines DC. In Asia, China was the largest importing country of DC from the Philippines.

Export DC from Sri Lanka in the first four months of 2020 experience a setback by 28%. Import restriction applied by Indian Government has affected the Sri Lankan export of the product since India is the main destination for Sri Lankan’s DC. Indian Government put a restriction on DC import to protect domestics manufacturers by setting a minimum import price for DC. It is worth noting that Sri Lankan export of DC rocketed in 2019 benefiting from an unusual low price. Sri Lankan export of DC jumped by 94% in the period of January-December 2019. The export volume soared from 25,556 MT during January- December 2018 to 49,667 MT over the same period of 2019. The increase reversed the negative trend in the previous years. In 2018, export volume of DC from Sri Lanka was 25,556 MT or dropped by 13% opposed to 2017’s volume. In 2019, India imported 20,527 tons of DC from Sri Lanka. The volume was more than 40% of Sri Lanka’s total DC export for the year. In total, Asian countries imported 28,775 MT from Sri Lanka, accounting for 58% of the country’s total export of the commodity. Other main importing countries were USA, Egypt, Canada and Iraq which imported 3,733 MT, 2,909 MT, 2,765 MT and 1,751 MT respectively. Export of DC from Indonesia is expected to go up in 2020. Latest data released by BPS-Statistics Indonesia showed that in the first four months of 2020, Indonesia sent 38,857 MT of desiccated coconut to global market which created USD 50 million of export revenue. The export volume was 16% higher than last year’s volume for the same period. It seems that current COVID-19 outbreak does not affect the shipment of the product. Singapore is still main hub for DC from Indonesia. Meanwhile other main destinations of the DC included Russia, Egypt, Thailand, China and Germany.