MARKET REVIEW OF DESSICATED COCONUT
Global trade of desiccated coconut (DC) is expected to weaken in 2020 attributed to low production worsened by Covid-19 pandemic. Import demand of desiccated coconut in 2020 is hampered by the Covid-19 Pandemic. World import of DC is expected to decline in 2020 due to lower production worsened by the Pandemic. During the first half of 2020, global import of desiccated coconut was 135,285 MT, a drop by more than 15% as opposed to the volume a year earlier. Demand of DC from USA, the largest importing country, during the period of January-September 2020 was only 28,976 MT or dropped by more than 15% as opposed to previous year import volume as reported by US Census Bureau. A decrease in import demand was also occurred in other main importing countries such as Turkey, Russia, Brazil and China. However, European countries (EU28) recorded an increase in import of DC during January-August 2020. Demand of DC from European countries during the period reached 74,016 MT of DC which was higher by 4% to the volume a year earlier.
On the other side, supply of DC has been expected to depreciate as production of coconut projected to lower worsened by the Covid-19 pandemic. Export supply of DC from Philippines, the largest exporting country, eased to level of 98,805 MT during January-August 2020. The export volume went down by 6% compared to the same period in 2019. A weak demand of DC from USA has apparently affected Philippines’ exports of the product. Export DC for Sri Lanka, another major exporting country, also experienced a drop until third quarter of 2020. Export DC from Sri Lanka during January-September 2020 was 22,826 MT which shrank almost 70% compared to the volume in 2019 for the same period. The drop was mainly due to import duties imposed by the Government of India, major importing countries of Sri Lankan DC, worsened by Covid-19 pandemic. Meanwhile export of DC from Indonesia during January-September 2020 was 93,293 MT which was 28% higher than a year ago for the same period. Indonesia seems benefiting from a higher demand from European countries supported by a lower supply of DC from Philippines.
Export destination of DC from Philippines were USA and Europe accounting for more than 60% of the total export. USA was the main destination for Philippines DC. During January-August 2020, 21,792 MT of DC was shipped to USA or 22% of the total export of DC from Philippines. Meanwhile from Europe, Netherlands was the main hub receiving 16,006 MT of Philippines DC. In Asia, China was the largest importing country of DC from the Philippines.
Meanwhile, export DC from Indonesia mainly sent through Singapore. More than 24% of the total export volume during January-September 2020 was shipped to Singapore. Other major destinations include Germany, Russia, Thailand, Egypt and China.
Price of desiccated coconut (DC, FOB US) in September 2020 was 35.7% higher as opposed to last year’s price. Until the third quarter of 2020, price of DC was relatively strong and stable amid global economic uncertainty due to COVID-19 outbreak. The price is expected to keep appreciating driven by expected robust demand and lower production of the product. 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.