Coconut market update 8 April 2026 Ceasefire, but the Fuel Aftershock Remains

Geopolitics: ceasefire, but the fuel aftershock remains

A crucial geopolitical event occurred overnight on April 7–8, 2026, as the United States and Iran agreed to a two-week ceasefire facilitated by Pakistan. US President Donald Trump announced the deal just before the deadline, which involves coordinated efforts to reopen the Strait of Hormuz, a strategic passage through which about 20% of global oil and LNG typically move. Additional diplomatic discussions are set for April 10 in Islamabad.

While the ceasefire is clearly positive news for global energy markets, industry stakeholders should be cautious and not expect an immediate normalisation of fuel supply chains. The conflict that began on February 28 caused the most significant energy supply disruption in the global oil market in history.

Tanker movement through the Strait nearly stopped, Gulf producers cut output by at least 10 million barrels daily, and many refineries and gas processing plants across the region were shut or damaged. Iran experienced substantial infrastructure damage, including strikes on bridges and energy facilities.

Even with the Strait reopening, experts warn that restoring full traffic will take time. Insurance and freight arrangements must be reestablished, over 150 ships stranded outside the Strait need processing, and damaged infrastructure within Iran and nearby Gulf countries will require assessment, repair, or replacement.

For Southeast Asia, especially the Philippines, the impact over the next three to six months will be significant. The region relies heavily on oil that passes through the Strait, and several biodiesel programs—like Indonesia’s B50 mandate set for July 2026—depend on stable regional fuel supplies and refinery economics.

Rising diesel and fuel oil prices will increase operational costs for copra mills, dryers, and exporters across the Philippines, as well as higher freight costs for bulk commodities. The Philippine peso’s depreciation to ₱ 60.40/US$1 as of April 7 adds further cost pressures for local processors importing equipment or fuel.

Market watchers should monitor the pace of Strait traffic recovery and anticipate a 3–6-month lag before regional fuel prices begin to decrease.

In the short term, premiums for desiccated coconut and coconut oil may stay supported by this cost increase, even as vegetable oil markets generally respond positively to the ceasefire. The upcoming peace talks in Islamabad on April 10 will be crucial in determining whether this two-week ceasefire will evolve into a lasting resolution.

Desiccated coconut: export market steady, local prices firmer

Export prices for desiccated coconut held steady during the week ending March 28, 2026, with seller quotations unchanged at 109.00–190.00 ¢/lb. FOB across all destinations — the USA, Europe, and other markets.

This marks the seventh consecutive month that prices have remained within this range, reflecting persistent supply tightness against sustained global demand. The UCAP weekly average for the nearest forward position was recorded at 146.50 ¢/lb. FOB, flat versus the prior week.

In the local Manila market, desiccated coconut prices edged higher to ₱5,414–5,715 per 100-lb. bag, up from ₱5,380–5,678 the previous week. Year-on-year, the nearest forward average of 146.50 ¢/lb. compares favourably with 136.00 ¢/lb. recorded in March 2025, reflecting a meaningful uplift of approximately 7.7% over the twelve-month period.

Philippines: copra and coconut oil – sharp domestic correction

Philippine copra prices have declined significantly from the late-Q1 highs. UCAP reports that Quezon copra offers are at ₱5,850–6,500 per 100 kg (bids at ₱5,750–6,400) for the week ending March 28, with other regions also showing considerably lower prices compared to the previous week.

This adjustment reflects a broader softening in vegetable oils and improving near-term supply. Internationally, UCAP notes that Rotterdam coconut oil trading remains quiet, though sellers indicate ~$2,260–2,465/MT CIF across nearby forward positions, with the nearby rate easing week-on-week.

The premium of coconut oil over palm kernel oil has also narrowed, demonstrating how quickly tropical oil spreads can normalise when palm and energy markets weaken. PCA’s April 7 daily sheet states that the average millgate copra is at ₱57.80/kg and farmgate at ₱43.83/kg, indicating that the domestic market now trades at significantly lower levels than the Q4 peaks.

Broader edible oils: watch palm policy and biofuel blending

The edible oils sector remains influenced by policy decisions. In Southeast Asia, biodiesel mandates—and any changes in their implementation—can rapidly affect palm oil prices. This then impacts laurics through substitution and spread trading. A critical short-term focus is on how quickly regional fuel markets stabilise after the ceasefire: if diesel prices remain high, biofuel economics become more favourable, potentially reducing the competition for feedstocks.

Shipping: Far East → Europe rates stable, but geopolitical premia linger

Drewry’s World Container Index remains steady at $2,287 per 40ft container (as of 2 April), with Asia–Europe rates unchanged despite Middle East tensions. While this stability is positive, the market still carries a geopolitical risk premium reflected in insurance costs, routing options, and schedule reliability. Shippers should expect “stable headline rates” but anticipate variability in total landed costs, especially if routes are changed or ports become congested.

Takeaway:

Coconut markets are experiencing some relief from the correction in domestic copra prices. However, the broader macroeconomic risks are shifting towards the energy sector. Despite the appearance of a ceasefire, the timeline for rebuilding or restarting Middle East oil infrastructure may keep fuel and logistics costs unpredictable until mid-2026. This ongoing volatility will directly impact processing expenses and the competitiveness of exports.

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.