Coconut prices have soared six-fold since 2022, reaching VND190,000 (US$7.26) per dozen, driven by soaring global demand.
According to the Vietnam Coconut Association, the appetite for coconut-derived products—including food, cosmetics, and biofuels—is expanding rapidly. Yet, this booming demand stands in stark contrast to the declining coconut output in Vietnam, a situation exacerbated by climate change, persistent droughts, pests, and outdated farming practices.
Investments in proper crop care remain woefully low; only about 20% of coconut farmers engage in necessary fertilization and pest control, leading to unsatisfactory and erratic yields. Most farmers opt for a more laissez-faire approach, allowing their trees to grow naturally, which contributes to the ongoing supply crunch.
The U.S. officially welcomed fresh coconut imports from Vietnam in 2023, adding to existing exports to China and a surge in purchases from various Middle Eastern nations. These international openings have tightened domestic supply and propelled prices upward, according to Cao Ba Dang Khoa, General Secretary of the Vietnam Coconut Association.
While the rise in prices signals a potential boost to farmers’ incomes, it presents difficult challenges for processing companies, which find it hard to increase their prices in an intensely competitive global market. Notably, prices are also climbing in neighboring coconut-producing nations such as Thailand, Malaysia, the Philippines, and Indonesia.
Vietnam boasts over 200,000 hectares dedicated to coconut cultivation, yielding approximately two million tons annually. The processing sector has witnessed impressive growth, expanding from just eight facilities in 2015 to 45 by 2024. Prominent firms like Betrimex, Luong Quoi, and Beinco are adopting modern technologies to adapt to this evolving market landscape.
As the coconut industry lumbers forward, it seems we may be witnessing the rise of the “water of life” from the tropics—because who could resist those benefits?
What is driving the rising price of coconuts in Vietnam?
The surge in coconut prices is largely attributed to increasing global demand for coconut-based products, combined with a decline in domestic supply due to factors like climate change and inadequate farming practices.
How has the processing sector adapted to these market conditions?
The number of coconut processing facilities has escalated from eight in 2015 to 45 in 2024, with companies investing in modern technologies to enhance efficiency and meet growing demand.
What challenges do farmers face in coconut cultivation?
Many farmers struggle with consistent yields due to outdated farming techniques, with only a minority investing in essential crop maintenance practices such as fertilization and pest control.
