Market Update 11th March 2025

Desiccated Coconut Prices Steady Despite Export Growth

Desiccated coconut prices in the export market have seen a slight increase, now ranging from $0.80 to $1.75 per pound FOB. This rise comes after prices held steady at $0.80 to $1.70 for four weeks. In the domestic market, the price for 100-pound bags in Manila varies between PHP 5,212 and PHP 5,501, indicating strong ongoing demand from the USA, Europe, and Asia. Additionally, Philippine exports of desiccated coconut surged by 36.4% year-on-year in January, highlighting robust international consumption despite minor fluctuations in domestic pricing.

Coconut Oil Prices Surge Amid Supply Challenges

Coconut oil prices have continued to rise, with CIF Rotterdam prices hitting $2,120 to $2,190 per metric ton. This increase is attributed to ongoing tight supply conditions. The market experienced a week of stable prices with no active buyers, indicating that sellers confidently maintained their positions amid these supply constraints. This recent surge in coconut oil prices follows a similar trend in other tropical oils, such as palm oil, which has slightly recovered after previous declines.

Market Developments Impacting the Coconut Industry

Sri Lanka has reported concerns over substandard coconut oil in its domestic market, raising quality control issues that could impact trade. The Brazilian government has also opted to maintain its biodiesel blend mandate at 14%, which could influence global vegetable oil demand and indirectly affect coconut oil pricing.

Shipping Prices

The Drewry World Container Index (WCI) composite index has dropped by 3%, now standing at $2,541 per 40-foot container. This figure is 76% lower than the pandemic peak of $10,377 reached in September 2021 and marks the lowest level since January 2024. However, it is still 79% higher than the pre-pandemic average of $1,420 from 2019.

Weather Patterns in 2025

Is there is potential for an El Niño event to develop in late 2025?

Although forecasts vary in their certainty, current climate models indicate that the ongoing La Niña conditions are likely to transition to ENSO-neutral by mid-2025. Some models suggest warming anomalies in the eastern Pacific that could signal the emergence of El Niño later in the year.

The ECMWF ocean forecast and other ensemble models show hints of warming in the Pacific Ocean, which could evolve into El Niño conditions by late 2025 or early 2026. However, other analyses suggest that the probability of a full El Niño event remains relatively low, with estimates as low as a 20% chance for its development.

In summary, while signs indicate a possible El Niño event emerging by late 2025, its likelihood and intensity remain uncertain, requiring continuous monitoring of oceanic and atmospheric conditions.