Indonesia has just opened up after long holidays for Ramadan.
The underlying weakness in the coconut markets (in both Indonesia and the Philippines), which was there during the first quarter of this year, has disappeared and has now been replaced by firm but stable undertones. Suppliers in both markets are no longer willing to take discounted bids but instead, asking for slightly higher levels. The differentials in pricing between Indonesia and the Philippines, which had narrowed in the first quarter, has once again opened up to around $ 150 – 200 per mt.
Sri Lanka, the other large supplier of DC (though not so much to Europe), has come off on price significantly but, even so, they are $ 50 – 75 higher than Indonesia though now lower than the Philippines.
The reasons that are being attributed for the weakness disappearing are :
1. Shortage of Nuts, which is somewhat severe in Indonesia
2. Peak demand (Ramadan demand from Middle East, now over)
For UK buyers there is the added gloom of a weak GBP to USD, though there is anticipation that USD will also weaken if the Fed cuts rates. If this happens the dollar value of the commodity will most likely rise.