Market update June 2021

Rates and Delays

The challenges of 2021 delays and high shipping prices have simply not gone away and have gotten worse.

Asia to US routes are becoming more congested and port congestion in the major west coast ports is not improving and in some cases getting worse.

A lot of the issues stem from delays at ports in mainland China and COVID outbreaks there.

We are seeing shippers struggling to get space on ships and knock-on delays at hubs like Singapore.

Most commentators suggest that delays will not get better till Christmas, and in our opinion, that may be optimistic.

Historic overcapacity has meant lower prices - we are now at full or near capacity for shipping lines meaning prices are going to stay high for the foreseeable future.

Production

Production is still about four to six weeks behind in the Philippines. Many factories, including Primex, have chosen to focus on catching up on old orders instead of selling new positions. This is because of the ongoing COVID restrictions in place in the Philippines, with staffing levels still a significant issue, hampering pushing up production on top of the reduced supply of raw coconuts into factories.

Positions are only available now from mid Q3 onwards, and that is heading into typhoon season when there is the possibility of other factors affecting supply.

What does all this mean from prices? – We are seeing spot desiccated relatively flat even off the back zero availability in Europe and there are no stocks built up and demand is at an all-time high meaning prices are liable to change.

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