News and Market Updates May 14th 2020

Production and Supply Update from The Philippines.

Not wholly unexpectedly, the lockdown in most parts of the Philippines has been extended to June, some measures have been updated, but overall the situation remains the same. 

All the staff at Primex continue to work hard as they can in a battle to bring production back up to date. And they are currently at about seven weeks behind, as we write this mid-May 2020.

In another development, Typhoon ‘Ambo’ has just made landfall over Eastern Samar, in the middle of the Philippines, its forecast to move North and increase in intensity right now and this means that there will likely be some delays to harvests and transportation, and may cause short term factory closures, all causing further delays.

TM Duché and Primex are working to ensure that urgent orders are shipped as soon as possible. But there is still a challenge to get a consistent supply of raw nuts to the factories. With social distancing and staff shortages, the factories are running with additional shifts to push to get lead times down further.

We have also been speaking to our customers every day, and there is uncertainty with many of them, as all 2020 plans and forecasts are now out of the window and they face the same challenges are the Philippines with staffing and social distancing meaning production volumes are uncertain and liable to change, plus supply chain volumes are also in a state of flux.

What does all this mean for the market?

Well very much like anything else at the moment, no one is 100% sure, in the short to medium term supplies will be restricted, with positions almost full, well into Q3, but with demand also changing, this means it’s a very uncertain market. 

The edible oils markets are likely to be pushed even lower, as crude oil prices are at historic lows.

We can make informed guesses about where the market will be in the next couple of months, but as the world is changing so quickly at the moment, we don’t know for sure.