Supply:
Over the last few months, the affects of 2023 El Nino season has started to show. As the effects of the drought take about a year to come to fruition, crop yields have begun to slow, and expectations are that shortages will continue throughout 2024 and well into 2025. In the Philippines, typhoon season is well under way and there have been a few storms that have caused production disruptions already.
Pricing:
Over the last couple of months, we have seen large increases to pricing, approaching highs not seen since the shortages caused by the 2009/2010 El Nino season. Given forecasted projections, we may see pricing surpass these marks.
Shipping:
Transit has improved recently, and we have begun to see lower rates and faster transit times in the last couple of months. However, a slower than expected Q3 shipping season looks likely to continue through Q4.
There is also a port strike which has begun on the west coast and this will mostly likely affect shipments. We are expecting possible delays and it is unknown how long this strike will last.
Things to watch for in 2024 Q4:
As the effects of 2023 El-Nino season are just beginning to be realized, with many mills already behind on production, pricing has increased to levels we have not seen in many years.
It is likely that supply will be an issue well into 2025, and as such, price relief may not be seen until well into 2nd half of 2025.
Intense storms are still a very real possibility over the next couple of months as we are still in the midst of storm season in the Philippines (May-December). Any future storm could further impact situation and we may see prices further increase.
As always, we will continue to keep our customers updated and will strive to provide the best possible service. If you ever have any questions, feel free to reach out to a member of the Klassic Coconut team or drop a question in our mailbox.