Market Review of Coconut Oil
January 2023
A bearish market of lauric oils showed in 2022. The higher stocks and supply apparently put a pressure on price of lauric oils. Price of coconut oil plunged from US$2,064/MT in April 2022 to US$1,155/ MT in December 2022 or a fall by 79%. Similarly, price of palm kernel oil showed the same pattern. The price of the oil deeply fell from US$2,441/ MT in April 2022 to US$1,067/MT or cut by more than half within 8 months. However, lower price brought about demand for the oils to hike. After experiencing a shock due to pandemic and Russia-Ukraine war, global demand for the oils upturned. The increase in shipments of coconut oil mainly supported by lower price and higher supply. Demand for the oil from European Union and US as the main importing countries went up considerably. US imports of coconut oil increased by more than 14% during January-November 2022 reaching 498,314 tons. Meanwhile, import of the oil by European countries leveled up to 795,917 tons during January-September 2022. The import was higher by more than 14% as opposed to the export volume in January-September 2021. Total export of coconut oil to these two regions is expected to grow more than 8% reaching more than 1.5 million tons
A different picture was found for another lauric oil, palm kernel oil. Demand for palm kernel oil rose in the US but went down in European countries. Shipments of the oil to US during January-November 2022 reached 316,709 tons which was 14% higher than previous year’s volume. Meanwhile, demand for the oil from European countries during January-September 2022 declined by 21% amounted for 556,072 tons owing to demand shifting in favor of coconut oil.
In the supply side, Philippines managed to improve their export of the products. Philippine Statistics Authority reported that during the period of January-September 2022, coconut oil exports from Philippines accumulated for 939,207 tons which a jump by 58% relative to the export volume a year earlier. Lower prices and higher supply have brought about higher demand for the oil. Shipments of the oil to main destinations such as European countries and USA increased notably.
Philippines export of the oil to European countries went up to 460,125 tons in January-September 2022 from 291,861 metric tons in JanuarySeptember 2021. At the same time, export to US market hiked from 122,554 tons to 159,287 tons. Likewise, Indonesia recorded a higher export volume of coconut oil during January-November 2022. During the period, Indonesia shipped 638,472 MT coconut oil to global market. The export was 15% higher as opposed to the previous year’s volume. The export earnings jumped from US$ 860.7 million to US$ 1,046.7 million or an upsurge of 22% reflecting a higher volume and price of the oil. Major markets for Indonesian coconut oil were United States, Malaysia, China, and Netherlands.
