MARKET REVIEW OF DESSICATED COCONUT

October 2018


Price of desiccated coconut (DC) showed an easing trend until the third quarter of 2018,. The largest price drop was recroded in Sri Lanka. Price of DC in Sri Lanka plunged from US$3,816/MT in March 2018 to US$1,860/MT in September 2018 or dropped by 51.3% in six months only. High price premium of Sri Lankan DC over Philippines’ and Indonesia’s DC together with lowering price trend of raw material, coconut, has brought about the price of Sri Lankan DC to fall. In Indonesia, the price went down from US$2,367/MT in January 2018 to US$1,892/MT in September 2018 or decreased by 20%. Meanwhile, Philippines’ price (FOB US) was relatively stable at average of US$2,429/MT until the third quarter of 2018.

The lower price of DC has given an incentive for importers to push their demand. USA, the largest DC importing country, was recorded to raise their demand for the product to the level of 32,419 tons during the first half of 2018. This was recorded an increase by 11.3% as opposed to the previous year’s import volume for the same period. Meanwhile, European countries recorded a 2.3% increase for import volume of DC during January-June 2018. The global market of DC is still supplied mainly by Philippines, Indonesia, and Sri Lanka.

Philippines maintained its increasing trend of desiccated coconut (DC) export since previous year. The official figure from the Philippines Statistics Authority showed that the export of DC in the first half of 2018 was 46,840 MT which was 4% higher than previous year’s volume for the same period. The export volume has been following a positive growth in the last two years. It should be noted that Philippines’ export of DC rose by 35.6% in 2016 and again went up by 26% in 2017.

After experiencing a shortage in supply of raw material due to El nino in 2015 worsened by a series of typhoons, Philippines’ DC production indicated a sign to recover following an improvement in coconut production as favorable weather came. This has enabled Philippines DC manufacturers to fulfill the global demands in international market. The lower price of DC has given a room for importers to boost their demand to accumulate stocks. In the first half 2018, America and Europe were still major destinations for DC from the Philippines accounting for more than 48% of the total export. USA was the main destination for Philippines DC in America which absorbed 12,326 MT or 26% of the total export. In Europe, Netherlands was the main hub receiving 16% of Philippines DC. Meanwhile from Asian countries, Japan and Malaysia were amongst the largest importing countries of DC from the Philippines.

In the period of January-August of 2018, accumulated export volume of DC from Indonesia was 72,836 tons. The export showed a positive growth of 20% compared to the previous year’s volume. The growth was following an increasing trend in the previous year. In 2017, BPS-Statistics Indonesia recorded that export volume of DC from Indonesia during the period was 98,038 MT which was higher by 23.7% compared to the 2016’s volume. An upturn

in raw material supply with a lower price compared to other competitors coupled with processing recovery have given a positive signal for Indonesian DC processors to boost their export. During the period, Asia and Europe were still the main market for DC from Indonesia. The two regions absorbed 82% of total export volume of DC from Indonesia. In Asia, Singapore is the main hub for Indonesian DC manufacturers. More than 22% of total DC export was sent to or via Singapore. UAE, Pakistan and Iran were the other major importing countries from Asia. Europe was the second largest market for DC from Indonesia in the period including Germany, Russia, Netherlands, Poland, Turkey and UK. The region received 25,607 MT of DC from Indonesia. The third largest market was America. Its share of Indonesia’s DC market was 8.5%. Amongst American countries, Brazil was recorded as the largest importing country. The country imported 5,568 of Indonesian DC constituting 4.2% of the total export. Global demand on DC from Sri Lanka was still affected from the high price of the product. In the period of January-August 2018, export of DC from Sri Lanka was only 14,344 MT or dropped by 32% compared to the previous year’s volume. The decrease was following the trend in the previous year. In 2017, export volume of DC from Sri Lanka was 29,418 MT or dropped by 40% opposed to 2016’s volume. However, looking at the monthly export data, as the price is easing, the demand for the product is improving. In January 2018, export of DC from Sri Lanka was only 928 MT and gradually increased to reach 3,009 MT in August 2018 when the price reached the lowest level since February 2016. Europe and Asia are the main market for DC from Sri Lanka. In the period of January-August 2018, European countries and Asia imported 4,412 MT and 4,775 MT of DC from Sri Lanka respectively. The imports of the two regions amounted to more than 64% of the Sri Lanka’s total export of DC. American continent has appeared to become an important destination for Sri Lankan DC. The continent absorbed 28% of Sri Lanka’s total export in the period. USA was the main importing country demanding for 2,502 MT or 17% of the total export.