Indonesia’s Surging Coconut Exports Squeeze Local Industry

The Indonesian Coconut Processing Industry Association (Hipki) has said fresh coconut exports, particularly to China, are absorbing a large proportion of the national output, leaving little for local manufacturers despite signs of improving coconut production, The Star, Jakarta reported this week. 

Hipki deputy chairman Amrizal Idroes said the value of fresh coconut exports in July amounted to around US$52 million, up almost 150% year-on-year (y-o-y).  He said most of the increased production is sold as raw material abroad, especially to China.

Exports of processed coconut products also showed strong growth. Shipments of desiccated coconut rose more than 85% to US$32 million, while coconut milk exports climbed to nearly US$36 million, up around 50% y-o-y. However, coconut water concentrates exports fell by 32% y-o-y to just US$2 million, with processors unable to secure enough of the fruit.

“Coconut water processors are running short of supply, because most fresh coconuts have already been exported,” Amrizal explained, noting mounting pressure on coconut-based industries.  Amrizal said only efficient and fully integrated companies, those capable of producing oil, milk, activated carbon and coconut water from each nut, could survive in today’s market environment.  On the other hand, companies that relied only on one product, such as desiccated coconut, were much more vulnerable to production shortfalls