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A relentless heatwave is reaching unprecedented levels in Asia. Governments across the region are sounding alarms as temperatures soar to hazardous heights.
A relentless heatwave is reaching unprecedented levels in Asia. Governments across the region are sounding alarms as temperatures soar to hazardous heights.
Thailand, for instance, is facing scorching temperatures surpassing 42 degrees Celsius, with some areas experiencing highs up to 52 degrees Celsius. This extreme heatwave isn’t confined to Thailand; it’s sweeping through other key regions such as the Philippines, Vietnam, Sri Lanka, and the entire Indian Subcontinent.
The intense heatwave is significantly impacting raw materials, leading to dire shortages across multiple commodities and regions. Consequently, we must anticipate that the impact on the 2025 crop will be similarly severe.
Adding to the challenge, substantial delays in shipments from origin and in transit are occurring. Raw material shortages are exacerbating these delays, compounded by disruptions such as the recent Suez Canal blockage. Many shipments are now rerouted via the Cape of Good Hope, adding at least an additional month to transit times.
As a result, spot inventories in destination markets are nearly non-existent. The demand for stock is incredibly high, with goods being sold almost as soon as they’re received. This surge in demand far exceeds the available supply, leading to a rapid escalation in prices across all origins.
For example, coconut prices have dramatically spiked since December. The Philippines can only ship from August onwards, and Indonesia faces strong demand with limited availability until June. Factory capacities are quickly being claimed, exacerbating the supply strain.
In Vietnam, the situation regarding raw materials is also facing many difficulties. Several Chinese-owned factories producing coconut water and coconut products have recently opened in Ben Tre, the main coconut growing region in Vietnam. They have been purchasing large quantities of coconuts, leading to a shortage of raw materials for producing desiccated coconut for domestic factories.
Looking ahead, we must brace for even greater demand as we approach Q3 and Q4, traditionally peak periods. Furthermore, as the natural low crop period for coconut approaches, the strain on supply will only worsen. Given the current weather challenges, we should expect a poor 2025 crop as well.
We strongly recommend that all buyers proactively plan and secure their purchases to avoid stockouts, as many are currently experiencing. We remain at your disposal to assist with your requirements and are committed to serving you during these challenging times.
