Market Review Coconut Oil
May 2021
Global demand of coconut oil weakened in 2020 attributed to the higher price and the global pandemic led to lower demand and shipment delays. Philippine Statistics Authority reported that during the period of January-December 2020, Philippines’ export of the oil fell to 840,973 MT from 1,239,326 MT in 2019. It was a significant drop of more than 47% as opposed to the export volume a year earlier. Import of the oil by European countries the major destination of coconut oil from Philippines, declined by 34.5%. Similarly, US imports of the oil from Philippines even went down deeper to the level of 162,094 MT or dropped by more than 53%.
Export of coconut oil from Indonesia also experienced a setback during the period of January-December 2020. During the year, Indonesia shipped 557,059 MT of coconut oil to the global market. The export was recorded 9% lower than the previous year’s export volume for the same period. Since last two consecutive years that Indonesia experienced a decline in export of the oil. Major markets for Indonesian coconut oil were United States, Malaysia, Netherlands and China. Export volume to these five countries constituted for more than 67% of the total export. High premium price of coconut oil over palm kernel oil has shifted demand of the lauric oils in the US at the expense of coconut oil. During the period January-December 2020 import of coconut oil decreased by 2.4%. Meanwhile import of palm kernel oil jumped by 11.5% in the same period. In total, US imported 823,581 of lauric oils which was higher than the import volume a year earlier. US was confirming strong demand of oils amid Covid-19 pandemic.
Meanwhile, a weak demand of lauric oils was showed in Europe continent. During period of January-December 2020, 1.7 million MT of lauric oils was shipped to European countries. It was 1.6% lower than that of the import volume a year earlier. Coconut oil contributed to the decrease of the import. Import coconut oil by the European countries was 852 thousand tons or dropped by 11% attributed to the price premium over palm kernel oil.
Price of coconut oil showed a bullish market since second half of 2020. Price average in the first quarter of 2021 was US1,502/MT which was 66% higher than the price average in the first quarter of 2020. The price is expected to remain strong following a tight supply and stocks. Ending stocks of coconut oil at the end of 2020 dropped to 0.44 million tons which was 13.7% lower compared to the stocks a year earlier. Price of coconut oil is expected to be stable at around USD1,500/MT in the second half of 2021.
