Coconut oil, once a common kitchen staple across Asia, is fast becoming a luxury item. Prices have soared to record highs, particularly in India, where costs have tripled in less than two years. Behind the surge lies a mix of poor harvests, climate volatility, and rising demand—from cooking pots to cosmetics aisles.
India Feels the Pinch First
India, the world’s largest consumer of coconut oil, has been hit hardest. Prices there have shot up to nearly ₹423,000 ($4,840) per tonne, forcing many households to switch to cheaper oils.
“I’ll use sunflower oil for daily cooking and keep coconut oil only for dishes where its flavour is essential,” said Leelamma Cherian, a homemaker in Kerala, reflecting a shift echoed in many kitchens.
The global benchmark price has also climbed, touching an unprecedented $2,990 per tonne. Even with expectations of some seasonal relief in Southeast Asia, traders say prices are unlikely to drop below $2,000 anytime soon.
Weather and Neglect Shrink Supplies
Coconut harvests are under pressure across Asia. Extended droughts, heat waves, pests, and typhoons have damaged plantations from India to the Philippines. El Niño worsened the impact in 2023, and because coconuts take nearly a year to mature, the supply shock has only become evident in 2024.
The problem isn’t just weather. Years of low prices discouraged farmers from replanting or maintaining trees. Many plantations now rely on ageing trees with stagnant yields. The pandemic deepened the neglect, as falling demand during lockdowns led to further underinvestment.
The result: global production has barely grown in 30 years, stuck at around 3.67 million tonnes annually, according to the US Department of Agriculture.
A New “Normal” for Prices
The International Coconut Community expects prices to remain elevated, projecting a range of $2,500 to $2,700 per tonne for the second half of this year. Analysts warn that even if supply improves, the market is unlikely to return to past levels.
“Farm neglect and weather instability mean the rally has effectively reset the price floor,” said one Singapore-based trader.
Coconut oil’s premium over palm kernel oil has widened sharply too—reaching $1,000 a tonne, compared with the usual $100–200 spread. That shift could ripple through other edible oils such as palm, soy, and sunflower, which consumers may increasingly turn to.
Not Just About Cooking
The surge is being felt beyond kitchens. Coconut water—marketed globally as a natural sports drink—has encouraged earlier harvesting of young coconuts, leaving fewer mature nuts for oil production. Manufacturers of shampoo, skincare, and health products are also grappling with higher input costs, since coconut oil’s high lauric acid content makes it difficult to replace.
“Even though customers are unhappy, we’ve had to raise prices almost monthly just to keep supply going,” said Joe Ling, executive director of Malaysia’s Linaco Group, a leading processor.
Export Shifts and Policy Battles
Indonesia, the top exporter, is shipping fewer barrels of oil as farmers pivot toward selling whole coconuts and other products like desiccated coconut. Oil exports dropped 15% in the first half of 2025, while shipments of processed coconut products rose nearly 60%.
Industry groups in both Indonesia and India are lobbying governments to intervene—Jakarta with temporary export suspensions to secure domestic supply, and New Delhi with calls to relax its steep import duties (over 100%) that make foreign oil uncompetitive.
Planting More, But Relief Is Years Away
Farmers across Asia are now rushing to plant new trees, with seedling demand so high that many nurseries have run out of stock. But coconut palms take four to five years to mature, meaning meaningful relief is still a long way off.
Until then, coconut oil—long considered a staple—may remain priced like a luxury.
