With the supply chain having significantly stabilized, increased demand of the ‘baking season’ rears its head for the 4th quarter



Far enough removed from the COVID era of logistics and supply chain headwinds, market pricing on the coconut ingredient portfolio shows signs of stabilization following the freight and logistics lows of Q4 2022 through Q2 2023. The stabilization, paired with the increased ‘baking season’ demand of Q4, often leads to increased pricing as Q4 develops. The additional and cyclical threat of tropical storms to the countries of origin may add to demand pressure.

Desiccated Coconut

While Filipino and Sri Lankan suppliers finally have shown signs of demand normalization on raw material, production costs, and demand in the 1st half of 2023, international freight has appropriately stabilized, helping the landed cost of the material immensely. There is some concern due to rising oil costs, though, that freight will pivot back to the upside.

In attempts to cycle inventory, many larger importers with problematic cost-basis inventory have flooded the market with short-coded and discounted materials, an opportunity for some and confusion for many in understanding ‘fair market’ pricing.

In addition to the internal market variables, external international economic pressures continue to add underlying stress to supply chains, causing some disruption concerns.

What this means to you:

It is strongly recommended that buyers become more aggressive with inventory positions and stock at least 2-3mo of inventory at this time, with expectations of costs increasing on the low-cost Desiccated Coconut during the ‘baking season.’

We are currently holding a small stateside stock of discounted Organic DC Medium, Organic DC Fine, Organic Coconut Chips, and Organic Toasted Coconut Chips. Please inquire if interested.

Organic Coconut Sugar

Sugar supply continues to stabilize, with freight having found lows and demand increasing. The forecast in Q4 is for small increases in freight as well as production costs due to less-than-optimal seasonal harvest, paired with higher demand.

While Coconut Sugar production and costs stabilized over the last 12 months, demand has increased steadily since February. In response to the recent pricing levels, buyers have stepped up, in the interim creating an increased lead time for fresh shipments from origin. For the first time since 2021, we are seeing growth in demand again for coconut sugar for larger volume buyers.

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 significant reprieve since the end of COVID, with pricing falling as much as 35% from the highs and back into the palatable sub $2/lb. area for a premium organic sweetener. In response, larger volume demand has picked up over the last year. It is recommended that all larger buyers move to contract supply through December at current rates in case of any quick swing in freight due to underlying international geo-economic riptides. Slightly longer lead times for larger spot orders should be expected.

Coconut Flour

With demand for fresh Organic Virgin Coconut Oil production increasing back to pre-COVID levels, organic coconut flour supply is stable from most origins, with product readily available for shipment.  Suppliers are booking contracts through Q4 2023 at this time, at stable rates. Due to the significant freight relief over the last 12 months, paired with increased production on OVCO, Coconut Flour is finally reaching pre-COVID pricing levels, over 40% off the highs.

For the first time since 2021, we are seeing demand increasing for Organic Coconut Flour as costs have returned to manageable levels as a gluten-free alternative flour choice.

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 now close to pre-COVID levels and off around 35% from the peak, sellers are stepping up to cycle older and higher cost-basis inventory.

We are currently holding a small stateside stock of discounted Organic Coconut Flour. Please inquire if interested.

Coconut Oil

Like flour, Organic Virgin Coconut Oil demand has increased and become increasingly stable, with the end of Q3 pricing up about 10% off the winter and spring lows. While Organic Virgin and Organic RBD pricing has fallen sharply over the last 12 months, the forecast is for increased demand through the baking season, with the added threat of tropical storms in Southeast Asia.

What this means to you:

Coconut Oil is on the higher demand side of the coconut ingredient portfolio, with costs increasing since the lows of early 2023. Like Coconut Sugar, we are seeing this material increase in demand in response to the lower market pricing and freight rates, stabilizing pricing slightly to the upside. We expect small increases in both OVCO and ORBD pricing into the Fall “baking season” months and advise clients to contract through December.

Coconut Milk Powder | Coconut Cream Powder | Coconut Water Powder

The Vietnamese origin Coconut Milk and Water Powder supply remains on the stable side of the portfolio, with freight falling as much as 75% since a year ago.

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

Demand has seen an uptick, especially for 50% Fat Organic Coconut Milk Powder, in the last 6 months, as buyers try to take advantage of the lower landed costs and discover preferred suppliers.

What this means to you:

Coconut Milk/Cream/Water Powder remains on the more stable side of the coconut portfolio, albeit at a small premium to pre-COVID levels. As the fastest-selling ingredients in our portfolio, we recommend that clients contract or order inventory needed through December due to steadily increasing demand over the last 3 years, and adoption of the powders over traditional liquid materials. We are offering discounts on all blanket POs and contracts on the powders through the end of 2023. Please inquire if interested.

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