Coconut Oil

Coconut Oil Global Market Outlook:

Key CNO Producing Countries (2022-23 E)

• Philippines (46 percent)

• Indonesia (29 percent)

• India (13 percent)

• Vietnam (5 percent)

• Papua New Guinea (1 percent)

Key CNO Exporting Countries (2022-23 E)

• Philippines (57 percent)

• Indonesia (24 percent)

• Sri Lanka (5 percent)

Key Supply Constraints/Drivers for CNO

• Approx. 2.6 percent rise in CAGR by volume over five years, due to demand from downstream industries (biodiesel, food, oleochemical, pet food industries)

Executive Summary

CNO growth figures in 2022–2023 are forecasted to be slightly higher compared to 2021–2022, owing to an anticipated rise in yield levels in the Philippines

The Philippines and Indonesia are the top two producers, which have surplus to export. India and Sri Lanka, although produce relative volume, do not export, due to substantial domestic demand.

Coconut Oil Market Outlook (2022-23 E)

• The world’s production and export of CNO is forecasted to drop by 3-5 percent in 2022–2023, mainly reflecting weather disruptions in SE Asian regions.

• Imports of CNO decreased, when compared to year-ago levels in the EU, the US, China, and other countries, due to high prices. But exports are expected to revive in Q1 2023 with the increased demand in end- user industries.

Global CNO Trade Dynamics

• The Philippines accounts for over half of the global CNO exports. The global CNO trade is based out of SE Asian countries. The Netherlands, the US and Malaysia are the largest CNO importers.

• The global coconut oil exports are expected  to reach about 2.01 MMT in 2022-23.

• The Philippines and Indonesia are the largest exporters of CNO, while the EU, the US, China, and Malaysia are the largest importers

• The Netherlands acts as a transhipment hub for the EU CNO consuming countries. With the establishment of the various food industries, their demand has increased.

Porter's Analysis on Coconut Oil

Supplier Power

• The suppliers have higher negotiation power than buyers, as the market supply is volatile and demand is high

• The suppliers are fragmented and volume is small from each buyer

Barriers to New Entrants

• CNO refineries require capital and equipment and the industry runs on economies of scale. Hence, the barriers to new entrants are high

Intensity of Rivalry

• CNO is mainly used in domestic consumption and oleochemical industries. The supply of CNO depends on the yield related to weather conditions

• The rivalry in the CNO industry is medium to high, as there are alternate substitutes, such as palm, soy, etc.

Threat of Substitutes

• Coconut cannot be easily substituted by palm stearin and other vegetable fats. However, they are being substituted in low-price foods by other oil and their processed variations

• Palm stearin and other vegetable oil-based substitution take place, depending on the price spread

Buyer Power

• The buyers of CNO are the food companies, and bio-diesel manufacturers and animal feed companies

• They do not influence the prices as much as the suppliers. The prices are driven by seasonal and fundamental factors