As a critical raw ingredient for coconut oil production, copra—the fleshy white meat of the coconut—holds a vital position in the global economy. Driven by a complex interplay of rising demand and shrinking supply, the copra market is facing dramatic fluctuations as farmers and processors struggle to keep pace with the plant’s growing popularity.
Recognizing the health benefits and other functional properties of coconut products across applications in food processing, cosmetics, pharmaceuticals, and other sectors, consumers and manufacturers alike are clamoring for coconut. To meet these demands with a sufficient volume of quality copra, the industry must evolve and embrace new approaches to producing and processing this valuable commodity.
Copra market demand
Known as the “Tree of Life,” the coconut is valued around the world for its versatility, as nearly every part of the plant serves a practical purpose. For example:
- The timber of mature coconut palms is used in furniture making and as a building material.
- The husk or coir surrounding the nut is used to make ropes, mats, and geotextiles, which are essential for controlling soil erosion.
- The coconut shell is processed into charcoal and activated carbon, then used as filters in air and water purification systems.
- Coconut water provides a popular healthy beverage.
- The coconut kernel, commonly referred to as copra, is processed into a range of valuable products. Whether dried and flaked to make desiccated coconut or pressed to extract coconut oil, this material holds the most value.
The global copra market is primarily driven by its use as a raw material for producing coconut oil, which accounts for approximately 40% of coconut usage each year and more than half (55%) of the worldwide revenue share. Rising consumer demand for natural, plant-based ingredients is driving the expanded use of coconut oil across various industries—especially in food processing, pharmaceuticals, cosmetics, and personal care products, where the functional health benefits of coconut oil are particularly evident.
However, differences in how coconut oil is processed result in distinct products that cater to various market sectors. Most coconut is processed on the plantation, where farmers remove the outer husk by hand, then split the shell open with an ax or machete to drain the liquid. They dry the copra in the sun or over fires of burning coconut husks, which can scorch the meat. Neither of these traditional drying processes is controlled, resulting in inconsistent moisture levels that can pose challenges for copra processors downstream. When coconut oil is extracted from this farm-dried copra, product quality and consistency can suffer.
By contrast, virgin coconut oil is cold-pressed from raw copra that has been grated or shredded and then quickly dried using minimal heat exposure in precisely controlled dryers. Unlike traditional coconut oil, which undergoes additional processing to be refined, stripping the oil of many valuable nutrients, virgin coconut oil maintains all the nutritional benefits and flavors of fresh coconut without any chemical processing. For this reason, VCO demands a premium price and can be used in organic product applications.
Fueled by increasing consumer awareness of the bountiful benefits and versatile applications of coconut, the global copra market is projected to nearly double in size from its estimated value of more than $21 billion in 2024 to nearly $40 billion by 2030.
Copra market supply
Unfortunately, coconut growers around the world are struggling to keep pace with the rising demand, due to several severe supply challenges that threaten to stunt the global copra market. With potential coconut shortages looming, copra producers are battling issues that include:
- Aging tree stock: Most coconut palms around the world are past their productive prime, which means these aging trees are generating lower yields each year.
- Outdated farming and processing practices: Smallholder farms ranging from 0.5 to 4 hectares in size produce more than 95% of the world’s coconut supply. These small-scale farms lack access to advanced farming techniques and improved seed varieties, which hinders their ability to increase yields. They rely on traditional sun- and smoke-drying methods that can severely affect copra quality and profitability.
- Climate catastrophes: Weather challenges, such as severe storms and droughts, can devastate coconut production, sending ripples through the global copra market. For example, Typhoon Yolanda wiped out an estimated 10 million coconut trees when it struck the Philippines in 2013, drastically reducing output and knocking the country out of its position as the world’s top coconut producer.
Due to these dire supply challenges, global coconut production has plateaued over the past decade, remaining at around 65 billion nuts per year. To ensure the long-term viability of the copra market, producers and processors must address this stagnant supply to meet increasing demand.
Revitalizing the copra market
The widening gap between current coconut supply and projected demand represents a major concern—but also a massive opportunity for growth. By tackling the production challenges that threaten the copra market, the industry can improve its outlook for the future.
- Replanting new trees—particularly improved varieties that offer higher yields, disease resistance, drought tolerance, and early maturity—can replenish the copra market’s aging stock. For example, the Philippine Coconut Authority committed to planting 100 million coconut trees by 2028 to reinvigorate its diminishing production volume and regain its spot as the world’s top coconut producer.
- Adopting advanced practices in coconut farming can significantly boost the productivity of the copra market. For example, the Philippine government is funding PHP 1.8 billion in a new fertilization program designed to increase yields of the country’s existing coconut plantations.
- Improving processing methods by replacing traditional sun- and smoke-drying inconsistencies with controlled mechanical processing can vastly improve the quality and efficiency of copra products on the market. Investing in advanced processing methods, like cold pressing to produce high-quality virgin coconut oil, can maximize profits while keeping pace with increasing production demands.
By embracing improved varieties on the farm and advanced extraction techniques downstream, the global copra market can revive its productivity and profitability, bringing global supply back in line with increasing demand.