The Story of 2021: Freight and Logistics Costs Overwhelm the Supply Chains

As Coconut manufacturers and importers continue to play catch up on high renewed demand from early COVID lulls, logistics factors including continued increases in freight pricing, limited shipping space, and extreme port delays continue to be the overwhelming factor on pricing and availability. Below we have provided an update on our products.

Desiccated Coconut

The first half of 2021 saw a rise in costs and delivery times for most of the desiccated coconut products as suppliers scramble to fill their existing contracts and spot purchase needs.  While Filipino and Sri Lankan suppliers do slowly show signs of catchup, freight cost and delays continue to be the biggest factor, keeping material costs high yet stable.

International freight rates continue to rise, now as much as 250% increase YoY from certain origins, causing most suppliers to provide only FOB pricing at this time, with no guarantees of space on vessels or shipment dates.  West Coast ports continue to be the most problematic ports, with not only extreme rates, but also 2–4-week delays standard on arrival due to congestion.

On average, suppliers remain backed up 1-2 months on orders, with many only offering pricing for shipments 2-3 months in advance. Demand looks to stay high through 2021, with supply limited and pricing stable around 5-year highs, firmly over the $2/lb. mark on Organic Medium and Fine. Many non-coconut focused importers are choosing to go ‘off the market’ on desiccated material at this time given the challenges. Some suppliers have also chosen to go off the market until relief shows.

What this means to you:

Buyers should be focused on ordering enough supply to last through at least the end of Q3 if possible. Expect pricing to stay at current extremes through September due to the stable yet high demand, higher shipping costs and continued spot order inventory shortage. Organic Medium Grade DC will remain on shortest supply due to larger volume industrial demands caused by “COVID catch-up”. In order to supplement the supply challenges, The Coconut Cooperative is now importing additional Medium and Fine Grade DC from alternate origins.

Organic Coconut Sugar

Sugar supply continues to be tight yet stable; however, as with all imported ingredients, freight costs and delays continue to impact pricing and timing of inventory. Indonesia is now taking its turn as the hardest hit origin for freight cost to USA, up 75-100% from June to August.

Raw material for coconut sugar continues to lag due to a less than optimal harvest paired with the pent-up demand on hold during the pandemic.  This has resulted in minimal availability of safety stock in the US.  In addition, manufacturers have recently warned of potential 2-3% price increases hitting by fall. The now extreme limitation of space on shipping containers further exacerbates the problem, causing continued tight supply through the summer months. 

The US Government’s failure to extend GSP (Generalized System of Preferences) has compounded pricing increases due to supply, resulting in a 5.1% tariff on all imported Coconut Sugar for the foreseeable future.

What this means to you:

Buyers can expect to pay higher prices as demand & shipping costs remain high through 2021.  In addition, extended lead times are to be expected, with freight averaging an additional 3-4 weeks to land at stateside warehouses.  We advise all buyers capable of pulling or contracting material through fall demands to do so.  There is a significant threat that these effects will continue into early 2022.

Coconut Flour

While demands on Organic Virgin Coconut Oil remain high, organic coconut flour supply is stable from most origins, albeit with extended lead times and premium pricing.  Many suppliers are booking contracts through Q4 at this time, at stable rates. As with all Asian-Pacific supply chains, longer lead times are to be expected with the continued international logistics issues. As a low-cost material, Coconut Flour also remains the hardest hit from freight and logistics increases.

The US Government’s failure to extend GSP (Generalized System of Preferences) has also hit all origins on this material, resulting in a steep 9.6% tariff on all imported Coconut Flour.

What this means to you:

Although pricing is stable, the un-extended GSP along with extreme freight rates have resulted in sharply increased pricing on the low-cost Coconut Flour which will remain for the foreseeable future. We encourage able buyers to contract this material through fall, especially at larger volumes. The Coconut Cooperative is offering discounts on this material at 10+ pallet contracts through considerations from its supplier-partners.

Coconut Oil

Like flour, both Organic RBD and Organic Virgin Coconut Oil production is becoming increasingly stable, but at a serious premium.  With the recent ban of Palm Oils at some origins, local markets have resorted to RBD material to replace a standard industrial ingredient, resulting in a significant demand squeeze on Organic RBD Coconut Oil pricing.

Although raw material and production costs have recently seen a bit of reprieve, freight continues to be the overwhelming factor, counter-acting any origin price relief and then some.

What this means to you:

Although Coconut Oil remains on the stable side of the Coconut Ingredient portfolio, material remains at a considerable premium, especially RBD material. Freight costs and delays continue to force buyers to have no choice but to pay premiums for material, which furthers the market’s bubble. We recommend buyers contract or take additional material to carry them through the fall months, if possible.

Coconut Milk Powder | Coconut Cream Powder | Coconut Water Powder

The Vietnamese origin Coconut Milk and Water Powder supply remain on the stable side of the portfolio, however as with all other portfolio materials, freight woes weight heavily on pricing, keeping costs stable yet high.

Second to Indonesia, Vietnam has been hit hard with freight cost increases, with a 50% increase June to August. With potential new rounds of COVID flare up hitting this origin, and shutdowns increasingly likely, there is potential for limited stock on these materials over the next 3-4 months.

What this means to you:

Coconut Milk/Cream/Water Powder continues to be stable albeit at a premium. With the potential for shutdowns, we are advising all buyers to contract, or order needed material through October at their earliest convenience.

Thanks for reading!  If you have questions about the availability or pricing on any of our organic coconut products, please contact us at