Coconut Oil Industry: 2022 and Beyond

Coconut oil industry is continuously growing. Its versatility plays a part, but the oil’s increasing popularity through numerous health benefit claims also helps. Use of coconut oil includes cooking oil, as well as important raw material for packaged food products, shampoos, coffees, and many more.

Outlook

The oil also plays a crucial part in creating a more sustainable food industry. After years of research, a US plant-based food company Impossible Burger uses coconut oil as one of its burger’s main ingredients. Its competitor, Beyond Meat, also added coconut oil in their Beyond Burger. Most recently, Redefine Meat, an Israeli food tech company, uses coconut oil to create plant-based 3D-printed meat. Therefore, in the future we can expect more plant-based food made of coconut oil.

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Coconut Oil Exporting Countries

Coconut oil industry consist of several types of coconut oil, for instance crude coconut oil (CCNO), RBD coconut oil, virgin coconut oil, and hydrogenated coconut oil (HCNO). One country might export a certain type more than the others.

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In 2020, Philippines was the largest exporter of all crude coconut oil exporting countries. According to The Observatory of Economic Complexity, Philippines exported $656 million worth of crude (copra) coconut oil. Other coconut oil exporting countries were Indonesia ($266M), Sri Lanka ($61.9M), Malaysia ($44.9M), and Papua New Guinea ($24.9M).

View of central Jakarta, capital of Indonesia. Indonesia is one of the largest coconut oil exporting countries.

While Philippines may be leading in the crude coconut oil section, Indonesia is leading in other oil types. Based on the data collated by International Trade Center, Indonesia exported $309.4 million worth of coconut oil and its fractions (excluding crude) in 2020. This category includes RBD coconut oil and virgin coconut oil. Other exporters were Philippines ($243.9M), Netherland ($241.4M), and Malaysia ($154.9M).

Coconuts are native to these coconut oil exporting countries, except for Netherland. Nevertheless, Netherland contributes more than half of total coconut oil imports across Europe.

Coconut Oil Importing Countries

Rotterdam, Netherland. Netherland is one of the largest coconut oil exporting countries.

The largest importers of crude coconut oil are Netherland, Malaysia, USA, and Germany. On the other hand, major coconut oil importing countries who imports RBD coconut oil and virgin coconut oil are USA, China, Germany, South Korea, and Sri Lanka.

New York, USA. USA is one of the largest coconut oil importing countries.

In 2020, USA imported $362.4 million worth of coconut oil (non-crude), more than twice of China’s imports. A survey cited in an Harvard article found that 72% Americans rated coconut oil as “healthy,” while only 37% nutritionist agreed. Hence, coconut oil image as health food boosts its sales in the US market.

Use of Coconut Oil

Apart from its use in food industry, coconut oil is a common ingredient in personal care products such as soaps, lotions, and cosmetics. The oil contains lauric acid, and its derivatives are used to produce detergents and cleansers.

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The antimicrobial properties of coconut oil make it an effective natural treatment for eczema and other skin conditions. Some hair treatment products also use coconut oil as their component to reverse damaged hair and cure dandruff. There are also websites advocating the use of coconut oil for pets.

Coconut oil can be used for your pets

The use of coconut oil does not stop at consumption and topical uses. The oil can also be utilized as fuel, or biodiesel. Mixed with conventional diesel fuel, coconut biodiesel has been observed to produce less carbon monoxide emission.

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Coconut Oil Consumption per Country

Statista 2022 graph domestic coconut oil consumption

As of 2021, the leading country in coconut oil consumption was the Philippines. That year, the Philippines consumed 7 million metric tons of coconut oil. The second largest consumer of coconut oil was the EU-27, which consumed just over 6 million metric tons.

Coconut Oil Quality Control

How can consumer distinguish a high-quality coconut oil from low-quality ones? For virgin coconut oil quality, the Asian and Pacific Coconut Community (APCC) has created a simple guideline. The oil must be perfectly clear, without any cloudy material or residual water, and must not have been subjected to temperature higher than 60⁰ Celsius during preparation.

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Due to virgin coconut oil’s high price, manufacturer may be tempted to cut cost by mixing VCO with less expensive oil. However, there are methods to detect impure VCO such as Fourier transform infrared spectroscopy (FTIR), NMR, and differential scanning calorimetry (DSC).

If you are looking for a less scientific method to detect adulterated VCO, you can utilize your senses. For an experienced coconut oil user, sensing coconut oil quality should not be a challenge. As mentioned by APCC, the oil must be clear. Adulterated virgin coconut oil will have a tinge of yellowish colour. The oil must also be heat resistant. If there is a burnt smell at lower heat, then the oil might be impure. There should also be a mild coconut aroma.

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For RBD coconut oil quality, Codex Alimentarius 2006 stated that “edible vegetable oils may be refined by alkali extraction and washing, bleaching and deodorization to remove undesirable constituents and to prolong shelf life.”

Coconut Farmers

Coconut farmers’ well-being are imperative in sustaining coconut oil industry. In 2014, Fair Trade USA launched Fair Trade-certified coconut products to help farmers earn additional premiums ranging between $40-$90 per metric ton of sold coconut.

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From October 2015 to September 2018, a public-private-partnership called Sustainable Certified Coconut Oil (SCNO) was initiated by SNRD Asia/Pacific to increase the quantity of sustainably produced and certified coconut oil as well as coconut farmers’ income in Philippines and Indonesia. The project involved Cargill, Procter & Gamble, BASF, and many others. On average, farmers who were trained and certified report 47% higher agricultural income compared to those who didn’t participate in the program.

Coconut Oil Controversy

The recurring issue against coconut oil is its high saturated fat content. This is the main subject of most coconut oil controversy. Coconut oil contains about 82% saturated fat, relatively higher than butter (63% saturated fat) and beef (50% saturated fat).

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Saturated fats are considered somewhere in the middle between what is considered as bad fats (e.g. trans fat) and good fats (e.g. unsaturated fat). Coconut oil controversy continues in contradicting claims, that is increases heart attack risk versus the oil being a keto-staple, a well-known diet of the health conscious.

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Despite its high saturated fat content, coconut oil is unique due to its high lauric acid content, roughly about 40% of its total fat. This makes the oil resistant to high temperature, therefore perfect for cooking. No other widely consumed vegetable oil has this content.

Lauric acid is also present in breast milk, which plays an important role in supporting baby’s immune system.

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COVID-19 Impact on Coconut Oil Industry

The pandemic caused decreased production of coconut oil due to lockdowns. In early 2022, coconut oil price continues to rise, after a 62% price increase from a year prior. Limited supply and high freight are the main causes of this soaring price.
Coconut Oil - Monthly Price - Commodity Prices - Price Charts, Data, and News - IndexMundi
COVID-19 does not only affect the commodity price, but also provoke thoughts on the oil’s new functionality. In early 2020, Dr Marissa Alejandria from the Philippine General Hospital led a study on the effectiveness of virgin coconut oil therapy for COVID-19 patients.

VCO’s high lauric acid content has the ability to destroy the viruses’ membrane. In August 2021, Imelda Angeles-Agdeppa et al from Philippines published a research paper substantiating the effectiveness of VCO-mixed meals in faster COVID-19 patients recovery.

Finding Your Coconut Oil Supplier

If your business requires RBD coconut oil or virgin coconut oil, our team at OilCocos.com are ready to help you. Our high-quality oils are widely used in food and cosmetics industry. Contact us for further inquiries