With logistics and freight costs finally reaching pre-COVID levels and demand balancing, Organic Coconut Ingredients show stabilization.

Far enough removed from the COVID era of logistics and supply chain headwinds, market pricing on the coconut ingredient portfolio shows signs of stabilization and rates back towards pre-COVID levels.

Desiccated Coconut

Filipino and Sri Lankan suppliers are finally showing signs of normalization on raw material and production costs and demand. At the same time, international freight has dropped 50-75% pulling landed costs down over the last 3 months. Nonetheless, the interim lows on raw material cost in December have already bounced back 5-10% moving into the start of the year.

In attempts to cycle inventory, many larger importers with problematic cost basis inventory have flooded the market with short-coded and discounted materials.  This poses an opportunity for some and confusion for others who are trying to understand fair market pricing.

The relaxation of international freight costs into the first two months of the year have spurred buyers to step in and contract at the lower rates, balancing out the demand/supply and stabilizing pricing.

What this means to you:

With the relaxed international logistics costs, buyers can become more aggressive and try to lock in rates through at least April/May, where demand usually increases into the late spring months. TCC is offering discounted contracts (of up to 10% depending on volume ) on desiccated coconut through May.

Organic Coconut Sugar

Sugar supply continues to stable, with freight falling but demand stable-to-increasing. The start of 2023 is forecast to have the best international freight rates in 2 years, almost back to pre-COVID levels.    

Coconut Sugar supply is stable, with older stateside material stocked at higher cost basis than fresh imports, creating selling pressure for companies with inventory to clear older material.

As a reminder, the US Government’s failure to extend GSP (Generalized System of Preferences) in 2021 remains active, resulting in a 5.1% tariff on all imported Coconut Sugar for the foreseeable future.

What this means to you:

Pricing on sugar has seen a definite reprieve moving in the late stages of 2022 and buyers have slowly stepped up to lock in reduced pricing. It is recommended that all buyers move to contract at the lower rates in case of any quick swing on freight due to underlying international geo-economic riptides, or any surge in demand as we saw in the years leading up to COVID. TCC is offering discounted contracts on Sugar for the 1st half of 2023, through June, please inquire for information.

Coconut Flour

Organic coconut flour supply is stable from most origins, with product readily available for shipment. Suppliers are booking contracts through Q2 2023 at this time, at stable rates. Despite the significant freight relief, as the lowest cost material in the coconut portfolio, coconut flour also remains the hardest hit from freight and logistics increases of the last couple of years. Demand on coconut flour has increased lately, as buyers step in at the 15%+ lower landed cost/rates.

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 continues to burden the cost of coconut flour, with pricing still above COVID lows despite the freight relief. With pricing getting closer to pre-COVID levels and off 20% from peak, buyers are stepping up to cycle older and higher cost basis inventory. Through June 2023, The Coconut Cooperative is offering 10%+ discounts on this material at 10+ pallet contracts through considerations from its supplier-partners to combat the logistics costs.

Coconut Oil

Like flour, Organic Virgin Coconut Oil production is becoming increasingly stable.  However, with recent years’ legislative production restrictions of Palm Oils at some origins, local markets have resorted to RBD material to replace a standard industrial ingredient. This has resulted in a significant demand squeeze on Organic RBD Coconut Oil pricing over the last 12-months, which is finally getting some relief. While the cost of OCVO has fallen sharply over the last 3 months, Organic RBD pricing continues be a challenge for larger buyers.

What this means to you:

Coconut Oil remains on the stable side of the coconut ingredient portfolio. Landed material costs have now almost returned to pre-COVID levels thanks to sharply decreasing freight costs. With looming international challenges still present and risk of freight swing to the upside, we recommend that buyers contract or buy material at current costs through at least Q1 2023. In order to combat freight costs, TCC is currently offering discounts on OVCO orders or contracts of over 10 totes through June, please inquire if interested.

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, with freight falling 50-75% since the start of November.   

As Vietnam was one of the hardest hit origins during the pandemic with regard to freight, the sharp decreases is showing fast relief on landed cost on this material. Where possible, it is advised that clients follow the trend of ‘cycling inventory’ landed at higher cost basis and restock at current pricing, which may prove to be interim lows.

Demand has seen an uptick especially on low-fat Coconut Milk Powder in the last 3 months, as buyers try to take advantage of the lower international logistics costs.  

What this means to you:

Coconut Milk/Cream/Water Powder continues to be on the more stable side of the coconut portfolio, albeit at a small premium to pre-COVID levels. As fastest selling ingredients in TCC’s portfolio, we recommend that clients contract or order inventory needed to last 90 to 120 days due to steadily increasing demand over the last 3 years, and adoption of the powders over traditional liquid materials.

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