Coconut oil prices in India and Asia have tripled in two years due to weak harvests, global demand, and aging plantations, impacting households, industries, and exports.
Coconut oil, once considered an affordable staple in Asia, has now become a luxury item as prices surge due to shrinking supplies and unrelenting global demand. India, the world’s largest consumer of coconut oil, has witnessed prices nearly triple in the last two years, straining household budgets and food businesses alike.
Coconut oil prices in India have hit a record ₹4,23,000 ($4,840) per metric ton, while global benchmark prices surged to $2,990 per ton, trade data shows. This sharp rise has been fueled by multiple factors: declining coconut harvests in India, Indonesia, Malaysia, and the Philippines; erratic monsoon rains; pest infestations; and aging plantations with lower productivity.
The International Coconut Community (ICC) has projected that prices will remain elevated between $2,500 and $2,700 per ton for the second half of 2025—well above the $1,000 per ton average in 2023. The Coconut Development Board of India noted that while there has been a surge in farmer interest to plant new coconut seedlings, the long gestation period of 4–5 years means immediate relief is unlikely.
Industry and Consumer Impact
The price surge has rippled across industries. Coconut oil, widely used not only as an edible oil but also in beauty products, pharmaceuticals, and ayurvedic formulations, has become expensive for both consumers and manufacturers.
- Food industry: Households in Kerala, Tamil Nadu, and Karnataka are cutting down on daily use, turning to sunflower and palm oil as cheaper substitutes. Traditional dishes such as Kerala’s fish curry and Tamil Nadu’s chutneys are seeing reduced coconut oil use.
- Cosmetics and healthcare: Skincare and haircare brands are battling higher raw material costs, forcing price hikes or reformulations.
- Global markets: Demand in the United States, Europe, China, and the UAE for organic coconut products, including virgin coconut oil and desiccated coconut, remains strong, widening the supply crunch.
Also Read: Turning Byproducts into Billions: Kerala’s Coconut Success Story
Coconut oil’s premium over palm kernel oil has now crossed $1,000 per ton, the highest gap ever recorded. This shows strong consumer preference despite high costs.”
Joe Ling, Executive Director of Malaysia’s Linaco Group
Government Measures and Outlook
The Indian government has been exploring policy responses, including easing import restrictions on coconut oil and related products, but trade experts caution that the global shortage leaves little room for relief. Indonesia, the world’s top exporter, has already shifted focus toward whole coconuts and processed products like coconut milk and desiccated coconut, reducing crude oil shipments.
Farmers in Kerala and Tamil Nadu are expanding plantations with government support, but industry experts say significant new supply will take years to materialize. Until then, high prices may persist, reshaping consumer habits and pushing coconut oil into a “premium category” globally.
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