Global Desiccated Coconut Market Grapples with Tight Supply

The desiccated coconut market is under strain as multiple challenges disrupt the supply chain. Franklin Baker from Philippine, a leading producer of desiccated coconut, has temporarily shut down operations across its three factories. Meanwhile, weather disruptions and rising coconut oil prices are compounding the challenges for producers and buyers alike.

Franklin Baker’s operations have reportedly been up for sale for years but have yet to attract the right investor. While the company has not officially confirmed a timeline for resuming production, the prolonged closures are causing uncertainty across the market.

Weather Challenges: La Niña Takes a Toll

Adding to the crisis, La Niña has brought unusual rainfall patterns to the Philippines, a major coconut-producing region. These conditions have disrupted harvesting and raised concerns over flooding in key areas. With La Niña forecasted to persist until early 2025, coconut output could face further disruptions, putting additional pressure on desiccated coconut supplies.

China's Heavy Buying Drains Fresh Coconut Supply

China’s aggressive purchasing of fresh coconuts is further tightening supplies. The country has ramped up imports from Indonesia, Vietnam, Malaysia, and the Philippines, leaving fewer coconuts available for desiccated coconut production. Philippine producers have paused offering new contracts until the market stabilizes.

Indonesia Faces Supply Crunch

In Indonesia, coconut factories are reporting raw material shortages as China dominates the spot markets. Many factories have opted for early maintenance shutdowns, while those still operating are running at just 25% capacity. Shipment delays have become commonplace as producers struggle to meet demand.

Sri Lanka’s Worsening Supply Issues

In Sri Lanka, rising coconut costs and raw material shortages have significantly reduced production. The country's mills are struggling to stay operational, further exacerbating the global shortfall in desiccated coconut.

Seasonal Factory Shutdowns Add Pressure

As the Christmas season approaches, many coconut-processing factories are preparing for their annual holiday shutdowns, which typically last 2-3 weeks. While this downtime allows for equipment maintenance and employee breaks, it comes at a critical time when supply is already constrained.





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