Vadakara: Rising demand in the international oleo chemical, food and biofuel sectors is expected to continue strengthening coconut oil prices and, in turn, the coconut sector. The January review report of the International Coconut Community (ICC) highlights strong industrial demand for lauric oils, including coconut oil and palm kernel oil (oils containing lauric acid).

Despite fluctuations in prices and production, industrial consumption of lauric oils remained stable in 2025 and is likely to continue in 2026. Coconut oil and palm kernel oil are key ingredients in the manufacture of detergents, pharmaceutical products and personal care items.

Natural oleochemical products are derived from these lauric-acid oils, and their international market has been strengthening.

The decline in global coconut production in 2025 significantly affected coconut oil consumption. Exports of coconut oil to the European Union and the United States fell. However, higher prices resulted in substantial gains.

Between January and October 2025, the European Union imported 7.49 lakh metric tonnes of coconut oil, compared with 8.23 lakh metric tonnes during the same period in 2024. This represents a nine per cent decline in imports, though higher prices led to an 81.3 per cent increase in value.

Palm kernel oil threat

With coconut oil exports declining, concerns have emerged that palm kernel oil is strengthening its foothold in lauric oil-based industries, posing a potential threat to coconut oil. While coconut oil imports into the European Union fell nine per cent, palm kernel oil imports rose 11 per cent. The same trend was observed in the United States. Exports of palm kernel oil from Indonesia increased by seven per cent.

Although coconut oil prices were previously higher, subsequent increases in palm kernel oil prices have provided some optimism for coconut oil. India still lags in oleo chemical production and coconut oil exports. However, rising global demand for coconut oil is expected to influence domestic prices as well. India produced 5.7 lakh metric tonnes of coconut oil in 2024-25, but exports stood at only 17,000 tonnes.