The paper highlights technological innovation in processing for product diversification, which can increase the income of coconut farmers. It explains the unhealthy competition of cheap oils in down-grading the coconut oil and low productivity of coconut compared to other crops, where mechanization is possible and cost reduction in production is available. The paper further discusses about virgin coconut oil and explaining the different methods of producing virgin coconut oil such as Fermentation Process, Direct Micro Expeller (D M E) and Fry-drying or Hot Oil Immersion Drying (HOID) and their merits and disadvantages of coconut. In conclusion the paper suggests geographically fragmented world of coconut production needs urgently to combine resources to develop markets using the excellent information already available and supporting market research so that the market will continue to grow.