Coconut oil prices are increasing, supported by tightening global supplies, driven primarily by a decline in production and heightened demand. Industry sources report that output in the Philippines—the world’s leading producer—is projected to fall to a four-year low in the 2024/25 season.
Further upward pressure on prices stems from limited exportable supply from the Philippines, linked to the higher biodiesel blend mandate introduced in October 2024. The increase in the mandatory biodiesel admixture from 2% to 3% is expected to significantly constrain the country’s coconut oil exports in the 2024/25 season. The Philippine government also plans to raise the biodiesel blend to 5% over the next three years, which may further tighten export availability. The Expana Benchmark Prices (EBP) for Crude Coconut Oil CIF Rotterdam reached a record high on May 6, climbing by 14.6% month-on-month and by 102.3% year-on-year (y-o-y).
According to the USDA, global coconut oil production for the 2024/25 season is forecast to decline by 5.4% y-o-y, with market sources attributing the drop to dry conditions in the Philippines that have adversely affected copra and coconut oil yields. Despite a 1.8% increase in beginning stocks, total global coconut oil supply is expected to fall by 5.0% y-o-y.
Focusing on the Philippines, coconut oil production in 2024/25 is projected to decline by 11.9% y-o-y to 1.6 million metric tonnes. Market sources note that deficient rainfall recorded in H2 2024 (July–December) is expected to reduce copra output, with a lag effect of approximately 15 months. Additionally, typhoons occurring from late October to early November 2024 reportedly caused irreversible damage to around 2.7 million coconut trees, further compounding the country’s supply challenges. For the upcoming 2025/26 season, production is expected to rebound, rising by 2.1% y-o-y, although it will remain 0.3% below the five-year average.
Written by Roxanne Nikoro
