6/20/2020 Coconuts Go Upscale, Boosting Price of Conventional Coconut Oil - Commoditiescontrol.

com

Login ID: Password: New User / Subscription Rate Contact Us : 7066511911 Partner Login

Home Veg Oils Pulses Cotton Spices Sugar/Gur Plantation Grains Precious Metals Metals Energy Others िहं दी

Coconuts Go Upscale, Boosting Price of Conventional Coconut

Oil
7 Apr 2016 8:22 am

By Lucy Craymer

Coconut oil prices have soared by nearly 20 percent in a month, largely because of the growing popularity of specialty
products like 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 Gwyneth Paltrow is among celebrity coconut fans, once revealing she swishes around virgin coconut
oil to whiten to her teeth. Top 5 Special Reports
USD/INR (Jun ‘20) – Inflection
Such trendy products come from young green coconuts, fresh coconut and even the flowers. That leaves less dried Point: Testing a Key Res...
coconut--copra--to be made into conventional oil, which is used in everything from dish detergent to medicine.
USD/INR (Jun ‘20) – Inflection
Point: Testing a Key Res...
The fallout has been a nearly 20% price jump since February, with the average price in March $1,448 a metric ton,
USD/INR (Jun ‘20) – Inflection
according to World Bank data released late Wednesday. That is more than 50% higher than the average price in 2013.
Point: Testing a Key Res...

Meanwhile, the interest in specialty products is only expected to grow. Indonesia Postpones Green Diesel
Plan to 2026
Global consumption of coconut water jumped 13% from 2014 to 2015, following a 24% increase the previous year, Labour Shortage Still a Challenge;
according to data from beverage research firm Canadean. Social Distancing Wi...

The trend toward specialty products is being felt throughout the coconut industry, suggesting that prices for conventional
oil aren't likely to drop significantly anytime soon, analysts say.

Farmers in the Philippines--the world's largest producer of coconuts--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 liters and virgin coconut oil was up 61% 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 time period, copra and coconut oil exports slightly fell, and the industry
group predicts it will drop 6.9% 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.

The Philippines is still reeling from the 2013 Super Typhoon Haiyan, which damaged or destroyed 44 million coconut
trees--about 15% of its palms. It will take at least until next year for them to bear fruit.

And Indonesia, the world's top harvester of coconuts, hasn't undertaken a program to replace old coconut trees that
because of age are seeing less fruit, meaning plantations are producing less nuts. The government is instead focused
on expanding rice, corn and soybean production.

Manufacturers aren't likely to stampede to coconut-oil substitutes, analysts say. That's because substituting with, for
example, petroleum-based fatty alcohols can upset product formulas and threaten product branding as environmentally
friendly. Palm kernel oil, which is produced from the seed of the oil palm, may get a boost instead.

James Fry, chairman at agribusiness analyst firm LMC International Ltd., sees some relief coming in the fourth quarter
of this year, as the worst of the El Niño phenomenon since 1997-1998 has passed.

PT Cargill Indonesia, which crushes copra into oil, described copra supplies as the worst he has seen in 16 or 17 years,
largely because of the high demand for whole coconuts.

Cargill is "struggling big time" to get hold of copra, said Satria Wardaja, Cargill's communications manager.

Write to Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

April 07, 2016 04:22 ET (08:22 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.

Disclaimer

About Us Contact Us Disclaimer Privacy Statement Terms of Use Bookmarks System Requirement Feedback Careers Dow Jones News Archives Payment
Copyright © CC Commodity Info Services LLP. All rights reserved.

www.commoditiescontrol.com/commodity-market/dowjonescommoditiesnews/coconuts-go-upscale-boosting-price-of-conventional-coconut-oil-20… 1/1