Latest Market News 14th Feb 2024

Latest Prices 14th Feb 2024

Desiccated Coconut $0.80lb FOB Philippines

Virgin Coconut Oil $2.65kg FOB Philippines

Banana Chips $0.90lb FOB Philippines

Pecans (New Year’s Crop)

Jr. Mammoth Halves Pecans $4.78lb DDP Laredo, TX

Large Pieces $4.73lb DDP  Laredo, TX

All other items available as well as roasted, flavored, & custom formulation available

Philippines Update 

A major Philippine manufacturer’s site in Davao has been closed and is also rumoured to be having financial hardships, which is causing the flow of orders to go elsewhere, bringing down supply for the Spot Market.

This closure will cause delays and shortages to their Q1 and potentially Q2 shipments, with larger clients kicking in contingency plans to overbuy anything nearby.

So, with a large supply taken out of the market, we have seen prices increase substantially as there is a fight for supply, not buyers. How long will this last? If you talk to the suppliers, it will only continue to go up. The question is, how much risk are you willing to take on?

El Nino weather is still affecting crops throughout Southeast Asia and the Philippines, causing some shortages in supply.

Off the back of this constriction on supplies, we expect an increase in coconut prices with many factories at reduced capacity at the moment.

Unfortunately, this situation is expected to exacerbate further due to the influence of El Niño, leading to anticipated price hikes.

Overall, 2024 is shaping up to be as volatile as the past 3 to 4 years, with no consistency or levelling out of markets.

As always, we suggest you get your order done sooner rather than later. And plan to even order slightly in advance to ensure on-time deliveries.

Shipping  

The Panama Canal, which is considered one of the most crucial shipping routes in the world, is currently facing a severe water crisis due to the El Nino phenomenon. The water levels in the reservoirs that supply the canal have significantly decreased, causing concerns for the government. 

Every time a ship passes through the locks at either end of the canal, it consumes as much water as half a million people use in a day. 

Due to the current water levels, the Panama government is limiting shipping to ensure there is enough drinking water for the people.

Because of these factors, the canal is running out of water, causing delays and disruptions to global shipping, with some ships resorting to paying massive bribes to jump the queues.

The long queues may make it necessary to sail around Cape Horn, which increases fuel costs and harms the environment.

Red Sea 

The attacks by Iranian-backed Houthi militants on vessels have made travel through the Red Sea and Suez Canal hazardous.

The safety of the crew is the top priority for shipping lines. Until a safe passage can be assured, many vessels are re-routing around South Africa and the Cape of Good Hope when travelling between Europe and the Middle East/East Africa and Asia.

The presence of international naval vessels from the US and 13 of its coalition partners has not stopped attacks by militants who use drones that cost 100 times less than the missiles used against them.

Almost all lines of Red Sea Freight remain diverting, so 80-day voyages, container shortages, and vessel shortages.

Also, we are seeing some lines not prepared to ship into Israel, causing challenges for some.

Freight is now hovering around $6,000 for 40ft FCL to Europe from Asia, but we are seeing some easing as demand has died down.

Global Trade

Last year, Mexico became the top country from which the United States imported goods, surpassing China for the first time in more than 20 years.

This change highlights the increasing tensions between the U.S. and China, as well as the U.S. government's efforts to import from countries that are closer to home and have friendlier relations with the United States.

The World Bank has predicted that the global economy will slow down for the third consecutive year in 2024. This is due to several factors including high-interest rates, persistent inflation, slumping trade, and a weakened China. 

The world economy is expected to grow by only 2.4% this year, down from 2.6% in 2023, 3% in 2022, and 6.2% in 2021, reflecting the robust recovery from the pandemic recession of 2020. 

However, global tensions that have arisen from Israel's war with Hamas and the conflict in Ukraine pose a risk of even weaker growth. 

Moreover, World Bank officials are concerned that poor countries with high levels of debt may not be able to make necessary investments to fight climate change and poverty.

Edible Oils 

Industry reports suggest that palm oil prices are expected to weaken in 2024, which could be indicative of a potential decrease in production or supply.

Stricter anti-deforestation rules aimed at curbing deforestation, like the EU's new law, could limit the expansion of palm oil plantations, potentially impacting production.

However, the full impact remains uncertain. Some existing plantations may increase yields to compensate, and the effectiveness of enforcement varies regionally. 

The El Nino weather phenomenon is anticipated to result in drier conditions across Southeast Asia, particularly in Indonesia and Malaysia, the two largest palm oil producers. This is expected to negatively impact palm oil cultivation and yields, potentially leading to a decrease in production.

A potential increase in global demand for biodiesel could also put pressure on supplies.

⁠If the war in Russia continues, will companies with production facilities in Russia move production elsewhere, causing production upheaval?

The edible oil market is currently experiencing a surge in prices due to higher crude oil costs and concerns about shortages.

This is particularly evident in Spain, where there are olive oil shortages.

Spain is the largest olive oil producer in the world, accounting for 70% of the European Union's consumption and 45% of the world's consumption.

The lack of rainfall in olive-producing areas across Spain significantly impacts the quantity of oil produced and its prices, which have increased by more than 70% in 2023 after a sharp rise in 2022.

Overall, 2024 is shaping up to be as volatile as the past 3 to 4 years, with no consistency or levelling out of markets.

As always, we suggest you get your order done sooner rather than later. And plan to even order slightly in advance to ensure on-time deliveries.

Pecans

Pecan availability is still strong after holiday bumps.

As we head into Easter/Lent we expect we will see another spike.

There is availability for now, but it may well run low soon.