Coconut Oil Prices Surge, Redefining Market Dynamics

Coconut oil prices have skyrocketed in Asia, driven by a mix of supply shortages and increased demand, with India at the forefront. Factors such as adverse weather and neglected plantations exacerbate the issue. Despite rising costs, demand remains strong owing to coconut oil's health benefits and culinary significance.

Coconut oil prices in Asia are soaring, with significant increases in India, fueled by supply shortages and booming demand for the healthful liquid. The oil's price has nearly tripled in two years, becoming less accessible to price-sensitive consumers accustomed to its unique flavor prominent in regional dishes.

The upward trajectory began in late 2024, intensified by weather disruptions in major production areas in India and Southeast Asia. Coconut oil hit a record 423,000 rupees a metric ton, pushing global prices to a new peak of $2,990 per ton. According to the International Coconut Community, further price stability is unlikely as demand continues to outpace production.

Beyond increased culinary demand, coconut oil is crucial for industries producing skincare products, prized for high lauric acid content. The supply constraints have prompted calls for policy changes in major coconut-exporting countries. Amidst soaring prices, plantations face challenges such as aging trees, seed variety shortages, and inconsistent weather, affecting yield recovery timelines.

(With inputs from agencies.)