Coconut Cream Market Update – December 2024

Coconut Market Update: Rising Costs and Supply Challenges

As we prepare for 2025, we want to share an important update regarding the coconut market, a key ingredient in our non-dairy products. Industry insights from leading suppliers—including Batory Foods, iTi Tropicals, and US Raws—indicate rising costs and supply constraints for coconut cream and coconut oil in the coming year. Here’s what you need to know:

Factors Driving Price Increases

  1. Weather Impacts:
    • El Niño and adverse weather conditions have led to smaller crop yields across key coconut-producing countries like the Philippines, Sri Lanka, Indonesia, and Vietnam.
    • Decreased rainfall has resulted in smaller coconuts, affecting the supply of raw materials.
  2. Global Demand:
    • Surging demand in markets like the U.S., Europe, and China is outpacing supply, exacerbating price increases.
  3. Logistical Challenges:
    • Shipping delays, port congestion, and geopolitical tensions in the Red Sea have further strained the supply chain, increasing shipping costs and lead times.

What This Means for You

  • Higher Prices: Prices for coconut cream, oil, and related products are expected to remain elevated until mid-2025, reflecting the ongoing supply shortages and production constraints.
  • Tight Supply: Limited stock is anticipated through spring 2025. Rest assured, we will keep you informed should we foresee any significant shortages of non-dairy products.

Our Next Steps

To ensure continued supply and manage risks:

  • We are actively working to onboard a second supplier for coconut cream to help mitigate potential shortages.
  • We are closely monitoring the market and maintaining open communication with our suppliers to stay ahead of any disruptions.

Recommendations for Clients

  • Plan Ahead: Secure your coconut cream supply early and plan for coverage through spring 2025.

We appreciate your patience and understanding as we navigate these challenges. If you have any questions or need assistance in planning for your needs, please reach out. Together, we’ll ensure smooth operations and continued success into the new year.