The global coconut industry is facing a crisis as supply shortages, rising prices, and conflicting interests among key players threaten to disrupt the market. The implications are particularly significant for exporters who rely on consistent supplies to meet global demand. Recent reports indicate that government intervention may be on the horizon to stabilize the market and prevent further economic fallout.
Sri Lanka Takes Control of Abandoned Coconut Lands
In Sri Lanka, the Coconut Cultivation Board (CCB) has announced plans to reclaim 500,000 acres of uncultivated coconut lands. The initiative aims to boost coconut production by revitalizing neglected plantations in key regions such as Kurunegala, Gampaha, Puttalam, and Kuliyapitiya. With the government allocating Rs. 790 million for the project, the objective is to increase the annual coconut harvest from 2,700 million coconuts to 4,500 million by 2030. The reclaimed lands will also be used to cultivate under crops such as vegetables, potentially creating new export opportunities for the country.
Indonesia’s Export Curb Proposal Divides Stakeholders
In Indonesia, the coconut processing industry is urging the government to implement a six-month moratorium on raw coconut exports. Industry leaders argue that the export ban is necessary to prevent supply shortages that could cripple local production. However, the proposal is met with resistance from farmers who view the export market as a rare opportunity to capitalize on soaring prices. The Indonesian Coconut Processing Industry Association warns that without export restrictions, businesses may face layoffs and disruptions to the supply chain. Meanwhile, the Indonesian Coconut Farmers Organization suggests a more balanced approach – implementing a minimum purchase price to protect farmers while stabilizing domestic supply.
Vietnam’s Strategy for Coconut Industry Expansion
Vietnam, the world’s fifth-largest coconut producer, is grappling with supply challenges exacerbated by drought, pest outbreaks, and saltwater intrusion. Despite these setbacks, the country’s coconut exports surged by 86% in early 2025, driven by high global demand for coconut oil, milk, and processed products. Experts recommend a comprehensive strategy that includes investing in post-harvest processing, improving logistics infrastructure, and expanding plantation areas to meet US and EU quality standards. Vietnam’s government is also advised to leverage trade agreements like RCEP to solidify its position as a key player in the global coconut market.
Price Trends and Market Outlook
Coconut oil futures hit an all-time high last week at over US$2800 per tonne CFR Rotterdam.
Conclusion
The coconut industry’s supply chain is under strain as competing interests, environmental challenges, and fluctuating prices converge to create a volatile market. With Sri Lanka and Indonesia considering intervention measures and Vietnam eyeing strategic expansion, the stage is set for significant changes in the global coconut landscape. For exporters, the coming months will be critical in navigating these shifts and capitalizing on emerging opportunities while mitigating risks associated with supply shortages.
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