Update on Market Prices 25th November 2020

We recently wrote about how market prices would be increasing, and we are now seeing this with prices for desiccated coconut up 33% since the beginning of October and coconut oil up a massive 47%.

Why has this happened?

Off the back of three Typhoons in as many weeks, and the devastation they caused, raw materials are now in very short supply, with local transport infrastructure disrupted. Production in some factories had ground to a halt, and there are areas still without power, along with the ongoing COVID crisis that continues to cause production issues.

Shipping

Shipping has been affected by local port congestion surcharges, and on local Asian routes a shortage of 40ft containers is driving up spot rates, Alphaliner said, there was a “spectacular” 53% increase on Shanghai-Singapore last week. And with changes to shipping movement to favour Asia Pacific US routes all having a knock-on effect to the prices major shippers can charge.

UK ports are also suffering increased congestion and its all the ports not just the headlines about Felixstowe.

We have seen some buyers hold off with orders in the past couple of months. Due to uncertainties with their order books, is now going to challenge many buyers.

We suspect prices may have nearly peaked, but they will remain at this level for the next couple of months. Shipping prices, however, are liable to increase further with no obvious end to the issues we are seeing at the moment.

Even with the news of vaccines, 2021 is liable to be another year of delays, congestion and headaches for producers, importers, traders and shippers.