Indonesia's coconut sector is facing mounting strain as surging fresh coconut exports, particularly to China, absorb a growing share of national output and leave processors struggling to secure raw materials.
According to the Indonesian Coconut Processing Industry Association (Hipki), fresh coconut exports in July were valued at around US$52 million, nearly 150% higher year-on-year. "Most of the increased production is sold as raw material abroad, especially to China," said Hipki deputy chairman Amrizal Idroes.
Processed product exports also showed strong growth. Desiccated coconut shipments rose more than 85% to US$32 million, while coconut milk exports climbed almost 50% to US$36 million. However, coconut water concentrate exports fell 32% to just US$2 million, with processors unable to secure enough fruit.
"Coconut water processors are running short of supply, because most fresh coconuts have already been exported," Amrizal explained. He added that only fully integrated companies—those producing oil, milk, activated carbon and coconut water from each nut—are likely to remain competitive, while single-product processors face heightened vulnerability.
Calls for regulation and replanting
To ease pressure, Hipki has proposed an export levy on fresh coconuts, though no final decision has been announced. "If the levy is imposed, farm-gate prices will inevitably fall below 4,500–5,000 rupiah. The government is assessing whether farmers can absorb that impact," Amrizal noted.
Industry leaders stress the importance of replanting programs to replace ageing trees, alongside improved efficiency and closer farmer-processor integration. Many of Indonesia's coconut trees are declining in productivity, limiting long-term output.
While the Trade Ministry acknowledges that processors face shortages, officials emphasize that farmers benefit from higher export prices. "Farmers are making good money right now, which is positive. The solution is to plant more," said Coordinating Food Minister Zulkifli Hasan.
Indonesia, the world's second-largest coconut producer, harvested 2.83 million tonnes in 2023, with coconut exports valued at US$1.55 billion.
Source: www.thestar.com.my
