Coconut & Edible Oils Market 2025 Review 2026 Outlook

In 2026, edible oils face two opposing forces: improved palm oil availability with softer prices through H2 2025, and ongoing policy-driven biofuel demand supporting consumption.

On top of this, a broader macroeconomic question arises: will crude oil prices decline into a lower trading range, and if so, will that weaken the biofuel floor that supports vegetable oils?

Meanwhile, the coconut market remains tightly balanced due to weather risks, ageing palms, and limited short-term supply responses.

2025 in review

Coconut oil

Coconut oil outperformed the broader oils basket throughout much of 2025, driven by tightness in lauric supplies and strong demand from the food and oleochemicals sectors. Although prices declined towards the end of the year alongside palm oil, they did not return to levels considered cheap for coconut. By mid-December, European trade showed a quieter price discovery process, with future offers moving into the low-to-mid US$2,200s per metric ton CIF, and decreasing copra prices indicating some upstream relief. Notably, coconut oil maintained a persistent premium over palm and palm kernel oils, indicating that it is not merely a follower of broader oil trends.

Desiccated coconut

Desiccated Coconut prices increased early in 2025 and then stabilised at a high level, where factors like lead times, pack availability, and shipment reliability were as crucial as price. This stability benefited buyers by aiding their planning but also established a higher cost baseline compared to late 2024.

Edible oils

Palm output improved, and H2 2025 pricing softened as stocks rebuilt, shaping sentiment across the oils complex. The key shift late in the year was that crude oil direction increasingly drove market psychology through its impact on biodiesel/renewable diesel economics.

2026 outlook: the macro variable meets coconut fundamentals

Crude oil and Venezuela: why it matters

If crude oil prices decline—possibly due to events in Venezuela or overall supply issues—the perceived minimum value of biofuels may diminish, weakening the confidence in higher prices for vegetable oils. Nevertheless, policy actions serve as a counterbalance: Indonesia’s plan to increase biodiesel blending to B50 by 2026 will allow more domestic palm oil to be used, thereby reducing the amount available for export even if crude prices fall.

Coconut Production

Although palm supply appears more stable, coconut supply remains vulnerable to typhoons and rainfall disruptions that impact harvest schedules, drying processes, energy availability, and port logistics. Ageing palms and slow replanting efforts hinder significant supply increases. Additionally, there is competition for nuts between oil mills and food-ingredient processors.

The most probable structure in 2026 involves lower volatility than the peak levels of 2025, but it will still maintain a high premium and experience event-driven spikes if weather disruptions affect production. 

Logistics: Drewry WCI and what it means for Q1 2026

Container freight prices declined significantly from earlier peaks through 2025, though seasonal strength at the end of 2025 impacts shipments of coconut ingredients in containers, especially for DC.

According to Drewry’s World Container Index, prices increased several weeks in a row into late December, reaching about US$2,200 per 40ft container, with Shanghai–Rotterdam routes in the mid-US$2,500s and forecasts noting early bookings before the February 2026 Lunar New Year.

Freight costs remain a substantial part of the total landed cost and should be considered a key factor in planning, not just a minor detail.

What to watch in 2026 

– Crude oil trends and biofuel margins

– Lead times for Desiccated Coconut and shipment reliability

– Freight Pricing from Asia to Europe in Rotterdam