Global Coconut Industry Newsletter 28th July 2025 – Market Rally Continues as Coconut Oil Approaches $3,000 Barrier

Market Rally Continues as Coconut Oil Approaches $3,000 Barrier

The global coconut oil market maintained its strong upward momentum this week, with prices in Rotterdam finally reaching trading activity at $2,900/MT CIF for both July/August and August/September deliveries. This marks a significant increase from the most recent trade of $2,585/MT CIF reported five weeks earlier. The market closed near the psychologically important $3,000 barrier at $2,855-2,952.50/MT CIF, driven by ongoing tight supply conditions at source and spillover gains from the broader palm oil complex.

The price rally has been particularly notable when viewed against historical levels. The current coconut oil prices, around $2,886.50/MT CIF, mark a dramatic 96% increase from the $1,472.85/MT recorded in July 2024. This surge has been driven by supply constraints and strong demand fundamentals, with the premium of coconut oil over palm kernel oil remaining around $1,071.50/MT. The sustained price strength has raised concerns about biodiesel blend implementation, with the Philippine Department of Energy suspending planned increases in biodiesel blending ratios due to the significant impact on petroleum product costs.

Desiccated Coconut Maintains Export Stability Despite Regional Challenges

The international desiccated coconut market has shown remarkable price stability, holding steady at 145-190¢/lb FOB for the eighth consecutive week.

China has been the primary driver behind the higher prices of desiccated coconut, as it has been rapidly consuming fresh coconuts for various coconut products popular among the middle class. However, it is summer in China, just like in Europe, and purchasing has paused for now, easing some of the pressure on desiccated prices and allowing production to catch up. Nonetheless, the supply of raw nuts remains limited, and there is concern that this summer lull may not last, with China expected to resume larger purchases come autumn.

The sector faces significant headwinds from new trade barriers, particularly the US decision to impose a 30% reciprocal tariff on Sri Lankan coconut products effective August 1, 2025. This development threatens to reshape global trade flows, as Sri Lanka’s coconut industry generates over $857 million annually, with the US accounting for more than 20% of the country’s coconut exports, valued at approximately $160 million per year. The tariff will likely redirect sourcing patterns toward other origins, potentially benefiting Philippine and Indonesian suppliers who can maintain competitive pricing in the crucial US market.

Domestic Price Surge Reflects Global Trends

Philippine domestic markets have mirrored international price movements, with significant advances across all coconut product categories. Copra prices in Quezon reached P9,250-9,400 per 100 kilos, up from P9,050-9,200 the previous week, while prices in Bicol, Visayas, and Mindanao climbed back above the P9,000 level to P8,850-9,050 per 100 kilos. Local coconut oil prices continued their rally, with crude coconut oil closing at P152.25-153.50 per kilogram and RBD coconut oil reaching P164.75-165.50 per kilogram, both excluding 12% VAT. The domestic price surge, representing more than a doubling from year-ago levels, reflects both the global supply-demand dynamics and the Philippine peso’s relative stability against the US dollar at current exchange rates of 56.935 pesos per dollar.