COCONUT OIL The coconut oil industry is struggling to keep up with a surge in global demand and industry leaders say urgent action is needed to promote a sustainable sector Gill Langham Coconut oil has a wide range of uses in the food, personal care and industrial sectors and the growing adoption of virgin coconut oil (VCO) in food and drink production is driving the market. As well as being a food ingredient, VCO also has the potential to be used as an immune system booster against COVID-19, according to the International Coconut Community (ICC), an intergovernmental organisation of coconut producing countries. “The COVID-19 situation has increased the demand for VCO in the Philippines, in particular among those with mild infections,” says Dr Fabian Dayrit, chairman of the ICC Scientific Advisory Committee on Health. The global virgin coconut oil market stood at US$2.7bn in 2018 and was forecast to reach US$4.7bn by 2024, an industry report by Report Buyer says. Meanwhile, coconut oil prices were hovering around US$1,000/tonne in September 2020, according to Index Mundi, and a Market Watch report projected that the global coconut oil market would reach US$5.5bn by 2026 from US$4.3bn in 2020. However, the coconut sector is struggling to keep up with global demand. Coconut farms tend to be monoculture and increasing tree senility raises concerns for the future. In terms of coconut oil, global production in 2019/20 is projected at 3.62M tonnes, according to forecasts by Statista. This figure has remained relatively unchanged since 2017 when production was 3.61M tonnes, according to the ICC. “The market is expanding at an exponential rate, especially for high value products, and production is decreasing,” said Dr Pons Batugal, chairman of the ICC’s Technical Working Group and president and board chair of the Farmers Community Development Foundation International (FCDF). Speaking at a webinar hosted by the Coconut Coalition of the Americas (CCA) on 8 October 2020, Dr Batugal joined a panel of industry experts to discuss
Keeping up with d the current status of the sector and the challenges it faces. “The industry and coconut farmers both need to be urgently assisted to make the coconut industry sustainable,” he said. “Any actions we take to improve the sustainability of the industry should be science-based, technically feasible, financially viable for the user, socially acceptable and environmentally safe.” The objective of such initiatives should be to help farmers increase yields and productivity, reduce production costs, reduce field losses and help them to obtain a fair market price, he said.
Global challenges
Lower production is mainly due to palm senility (the global average of ageing palms is about 50%), typhoons, pests and diseases, drought and a lack of quality materials. “If we don’t replace our senile coconut palm, there is going to be a further decrease in production in the next five to 10 years,” said Dr Batugal. Action needed to rebalance the world coconut situation included replanting 655M senile palms, increasing yields and farm productivity and expanding coconut hectarage, Dr Batugal said. To increase
yields, large-scale replanting was needed using early-bearing, high yielding and disease resistant varieties.
The market
Coconut palm is grown in over 90 countries on around 12.1M ha of land, producing around 69M nuts/year, according to the ICC. The global export value of coconut products in 2019 reached US$11.6bn. The coconut is predominantly a smallholder crop with 92% of businesses run as small operations with farmers growing less than two hectares per family, the ICC said. The Philippines and Indonesia are the world’s largest producers of coconuts and exporters of coconut-based products. Other producers include Malaysia, India and Vietnam. In terms of coconut oil, the Philippines produced more than 1.3M tonnes and exported 951,353 tonnes in 2018, while Indonesia produced 1M tonnes and exported 677,699 tonnes, according to figures in the ICC Coconut Statistical Yearbook 2018. The area under coconut in the Philippines was 3.63Mha in 2018 with an estimated 347M bearing coconut trees. In
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