Vietnamese Coconut Prices Remain High

According to Vietnamese media reports, the price of fresh coconuts in Vietnam has surged, rising sixfold from 3,000 Vietnamese dong ($0.11) per kilogram in 2022 to 18,000–19,000 dong ($0.69–0.73) per kilogram currently.

The farm gate price for fresh coconuts has recently risen to 180,000–190,000 dong ($6.89–7.27) per dozen. Including transportation and grading costs, first-grade coconuts can retail for as much as 250,000 dong ($9.57) per dozen, while second-grade coconuts are priced at 140,000–170,000 dong ($5.36–6.51) per dozen.

Industry insiders have observed that after a downturn triggered by the COVID-19 pandemic, the coconut market began its recovery in 2022. Following a period of stability, raw coconut prices have now entered a phase of significant growth.

The sharp price increase is attributable to the dynamics of supply and demand. Global demand for coconut-based products, including food, cosmetics and biofuels, continues to rise. Meanwhile, Vietnam’s coconut production is declining on account of factors such as climate change, prolonged drought, pests, diseases and outdated farming practices. Currently, only about 20% of farmers invest sufficiently in coconut care, fertilization and pest control, while the majority rely on natural growth, leading to low and inconsistent yields.

Cao Ba Dang Khoa, secretary general of the Vietnam Coconut Association, noted that extreme weather conditions have adversely impacted yields. Simultaneously, the sharp rise in raw coconut exports has further tightened the domestic supply available for processing. The United States approved the import of fresh coconuts from Vietnam in 2023, followed by China in August 2024. Additionally, several Middle Eastern countries have been steadily increasing their imports of Vietnamese coconuts.

Despite growing exports, Vietnam’s domestic production capacity and efficiency have struggled to keep up, resulting in intense competition for raw materials. The country currently cultivates over 200,000 hectares of coconuts, producing approximately 2 million metric tons annually. Meanwhile, the number of packaging plants increased from just eight in 2015 to 45 in 2024.

This trend is not unique to Vietnam. According to the International Coconut Community, countries such as Thailand, Malaysia, the Philippines and Indonesia are also facing a limited supply of raw coconuts due to adverse weather, fertilizer shortages and weak supply chains. However, nations like the Philippines and Indonesia have managed to retain investors by implementing effective credit support programs and improving their supply chains.

While rising coconut prices have provided short-term benefits for farmers, processing companies face difficulties in increasing their product prices on the global market owing to intense competition. The Vietnam Coconut Association has proposed measures such as regulating raw coconut exports through taxes or quotas and supporting farmers in improving crop varieties, adopting advanced cultivation technologies and accessing credit. These steps aim to promote the sustainable development of the entire value chain.

Image: Pixabay

This article was translated from Chinese. Read the original article.