COCONUT OIL PRICES GOING UP WORLDWIDE
THE INTEREST IN SPECIALTY PRODUCTS IS ONLY EXPECTED TO GROW. Coconut water and sugar make a splash, reducing supply for use as ingredients in less sexy products
Coconut oil prices have soared nearly 20 per cent in a month, largely because of the growing popularity of specialty products such as coconut water. In supermarkets, coconuts are being sold with pull tabs to be drunk like beer. Coconut sugar is being touted as healthier for diabetics. And US actress Gwyneth Paltrow is among celebrity coconut fans, once revealing she swishes around virgin coconut oil for oral health and whitening her teeth. More coconut growers are harvesting their fruit young for the water instead of allowing them to mature for coconut oil, creating a shortage in the oil market. Such trendy products come from young green coconuts, fresh coconut and the trees’ flowers. That leaves less dried coconut—copra—to be made into the conventional oil that is used in everything from dish detergent to medicine. The result has been a jump in prices since February, to an average in March of US$1448 (FJ$3034.43) a metric ton, according to World Bank data released late Wednesday. That is more than 50 per cent higher than the average price in 2013.
Meanwhile, the interest in specialty products is only expected to grow. Global consumption of coconut water jumped 13 per cent from 2014 to 2015, following a 24 per cent increase the previous year, according to data from beverage research firm Canadean. The trend toward specialty products is being felt throughout the coconut industry, suggesting that prices for conventional oil aren’t likely to drop significantly in the near future, analysts say. Farmers in the Philippines, the world’s largest producer of coconut oil, for example, are increasingly being asked to harvest younger coconuts, as middlemen chase after the higher prices they net over fully mature ones.
In the Philippines, coconut-water exports more than doubled to 66.3 million litres and virgin coconut oil was up 61 per cent to 34,227 metric tons in the 11 months to November 2015, according to the latest available data from the United Coconut Associations of the Philippines. In the same period, copra and coconut-oil exports fell slightly, and the industry group predicts they will drop 6.9 per cent to 2.1 million metric tons in 2016 from last year. “Increase in cost of production narrowed down margins, and the industry players naturally moved towards high-margin [coconut] products,” said Maduka Perera, owner of Ceylon Tropics, a coconut business in Sri Lanka. Meanwhile, supplies will continue to feel pressure.
Demand for specialty coconut products like drinks and sugar has pushed up prices for basic oil used in such things as dish detergent. Above, a worker runs behind a horse carrying coconuts in
September 2015 during harvest time at a coconut plantation in Banyuwangi, Indonesia’s East Java province.