Coconut Market Update 2nd June 2026

El Niño

The weather risk from El Niño is now becoming more worrisome, with most client models suggesting a 79% chance of El Niño developing between June and August 2026 and lasting into early 2027. For coconuts, the primary concern isn’t immediate crop loss but delayed flowering, stress during nut set, reduced rainfall in key production areas, and increased risks related to power and water for processors. These effects are expected to influence future supply more significantly in late 2026 and 2027.

Strait of Hormuz
The Strait of Hormuz continues to pose a significant macro risk. Shipping through the Strait remains disrupted, and ongoing uncertainty regarding a potential US–Iran deal. Any continued blockage could drive up costs for bunker fuel, insurance, and crude-related freight, quickly impacting domestic fuel prices and inland logistics in the Philippines. Locally, fuel prices in Metro Manila stay high, with diesel averaging ₱82.54 per litre and unleaded at ₱85.88 per litre from June 2 to 8, exerting pressure on trucking, generator usage, and mill operating expenses.

Desiccated Coconut
Desiccated coconut is still priced within its key export range of 109–190¢/lb FOB, unchanged for the fifteenth straight week, while the UCAP average seller price stands at 144¢/lb FOB for the USA, Europe, and other markets.
Locally, however, the price of DC increased to ₱5,705 per 100-lb bag, a ₱24.50 rise from last week, indicating that processors are still managing some domestic cost pressures despite export prices remaining relatively stable.

Coconut Oil
Coconut oil has been the weaker sector; Rotterdam sellers lowered prices to $2,045–2,093.50/MT CIF by the weekend, with the weekly average dropping $74.55/MT to $2,111.70/MT. PCA’s latest daily market sheet for 29 May shows Europe CNO at $2,160/MT CIF, with palm kernel oil close at $2,155/MT, resulting in very little lauric premium that day. This marks a significant shift from the earlier May wider CNO-over-PKO premium and indicates a more cautious outlook for near-term oil-linked prices.

Copra Price in the Philippines 
Copra prices have declined across the Philippines. According to PCA’s 29 May daily averages, farmgate copra is now ₱44.22/kg, down from ₱46.27/kg last week and ₱57.53/kg a year ago. Millgate prices have fallen to ₱52.69/kg from ₱58.01/kg last week and ₱73.21/kg last year. This indicates that the raw-material market remains well below 2025 levels, although regional differences are still significant, with Region VII’s millgate at ₱65/kg and several farmgate areas in the low-to-mid ₱40s.

Container Shipping 
According to Drewry’s latest World Container Index commentary, spot rates have increased for the fourth straight week. Asia–Europe routes continue to be supported by early peak-season demand and higher FAK levels. The Shanghai–Rotterdam rate is about $2,861 per 40ft container, while Shanghai–Genoa has risen to $4,253 per 40ft. Drewry anticipates these rates will keep climbing in the coming weeks. For Philippine exporters shipping through Far East networks to Europe, this indicates that buyers should secure space for July and August now and not assume that lower CNO will fully counteract logistics inflation.

In Summary

Desiccated Coconut stays price-stable with demand supporting it; coconut oil and copra prices are softer. The main upside risks now shift from spot demand to factors like El Niño, rising freight costs, Hormuz-related energy volatility, and Philippine fuel expenses.

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.