Coconut Market Weekly Update 11th May 2026 – El Niño signal for 2026 and why coconut should care

Several major climate centres predict that El Niño is likely to develop around mid-2026, with a high chance of lasting into late 2026 or early 2027. NOAA’s CPC forecasts an 82% probability of El Niño forming between May and July 2026, likely persisting through the Northern Hemisphere winter of 2026–27. The WMO also notes a consensus among models for its emergence during summer or autumn 2026, with possible continuation toward the end of the year. Additionally, the IRI’s ENSO outlook indicates a transition from neutral conditions towards El Niño with a high likelihood.

Market relevance for coconut Philippines and wider areas

Philippines: El Niño typically raises the risk of rainfall deficits and heat stress, which can lower yields and complicate copra drying schedules, which often translates into higher price volatility even when global demand is steady.

Indonesia / Vietnam / India / Sri Lanka: Tighter regional supply is already a theme in parts of Southeast Asia (UCAP notes sharp coconut price increases in Vietnam linked to dry weather and supply constraints). If El Niño strengthens, supply-side premiums can reappear quickly across Coconut Oil, Desiccated Coconut, and downstream ingredients.

In an El Niño year, buyers should begin to think about their coverage for Q3–Q4 and into 2027.

Copra backdrop (feedstock signal)

Values are still declining. UCAP’s weekly Quezon copra indicators decreased, and PCA’s average millgate copra price on May 15 was ₱58.41 per kg lower compared to last week, month, and year in the PCA data.

Several factors influence this trend. Overall demand for edible oil has decreased, while rising production costs, mainly due to higher oil prices caused by the conflict in the Straits of Hormuz, have led producers to cut back to save expenses; these increased costs might cause a slowdown in production in the upcoming months.

Desiccated coconut: export range steady; Manila market slips

Desiccated coconut remains notably level on the export side. UCAP reports that the export price range has stayed the same for 13 consecutive weeks at 109–190¢/lb FOB, with the current assessment at 146.50¢/lb FOB across the USA, Europe, and other regions, no change from last week.

In the Philippines domestic spot market, UCAP shows Manila DC (₱/100 lb bag) finally decreasing to ₱5,503–5,809 after two weeks of firmness (previous week ₱5,510–5,816). This slight domestic decline, while export prices remain steady, indicates that processors continue to balance raw material costs with export commitments rather than focusing on volume growth.

Coconut oil: Rotterdam eases again; local values soften

Coconut oil remains the weakest segment in the tropical oils market this week, with Rotterdam prices steady and little indication of new demand. UCAP estimated European (Rotterdam) CNO sellers’ offers at $2,130–2,235/MT CIF for nearby and forward contracts, with the nearest forward at $2,225/MT, a $38.25/MT decline from last week’s $2,263.25/MT.

Locally, the price outlook is mixed to softer. UCAP’s weekly range for crude coconut oil (VAT excl.) stayed at ₱109–135/kg, while RBD CNO (VAT excl.) eased to ₱135.50–142.50/kg. PCA’s daily snapshot (15 May) confirms a softer trend, with crude CNO at ₱123.20–147.84/kg (VAT incl.) and RBD CNO at ₱151.20–159.04/kg (VAT incl.). The late-week pullback in palm oil and broader vegetable oil profit-taking are still influencing CNO trends. UCAP observes the CNO premium over PKO narrowing again in most nearby positions, reflecting subdued demand.

Container Prices up 12%

Drewry’s latest World Container Index (WCI) report from 14 May 2026 indicates that freight markets are strengthening again. The overall index increased by 12% week-on-week to reach $2,553 per 40ft container. On the Far East–Europe route, gains are attributed to FAK rates and carrier capacity reductions: the Shanghai–Genoa route rose 20% to $3,701 per 40ft, and Shanghai–Rotterdam increased 11% to $2,413 per 40ft. Drewry observes that the Asia–Europe peak season might start earlier than usual due to improving bookings, tightening vessel space, and geopolitical uncertainties. These factors, along with rising bunker costs and active carrier surcharges, are exerting upward pressure on rates into the upcoming week.

Note:

The Rotterdam market is rarely used nowadays. Most transactions are handled directly by major commodities traders, typically known as ABCD—Archer Daniels Midland, Bunge, Cargill, and Louis Dreyfus, with Wilmar also being a significant player. These firms buy directly from millers in the Philippines, thus bypassing the Rotterdam market. When we refer to a quiet market, it doesn’t necessarily mean no business is being done; rather, it is just not publicly disclosed. Therefore, it shouldn’t be seen as an indicator of the market’s overall health or future direction. The UCAP in the Philippines relies on this information for its market forecasts, as it is the only available resource. We also pass this information on as part of our many information sources, noting that we do not have access to private trades beyond our own.