MARKET REVIEW OF COCONUT OIL
As price of coconut oil dropped, Philippines boosted their export of coconut oil. In the period of January-September 2019, Philippines shipped 870,456 MT of coconut oil to the global market. The export volume was 33% higher than the previous year’s volume for the same period. Philippines records an increase in export in last two consecutive years and most likely to again increase in 2019 gaining from low price of the oil. Philippine Statistics Authority reported that during the period of January-September 2019, Philippines mainly sent its coconut oil to European countries and US. 51% of the total export was sent to Europe and 28% was shipped to US. Malaysia, Indonesia, China, and Japan were other main destinations of coconut oil from Philippines. The four countries imported 65 thousand MT, 41 thousand MT, 38 thousand MT and 25 Thousand MT respectively during January-September 2019.
Meanwhile export of coconut oil from Indonesia experienced a setback during the period of January-November 2019. Indonesia shipped 547,849 MT of coconut oil to the global market during the period of January-November 2019. The export was recorded 15% lower than the previous year’s export volume for the same period. It should be noted that Indonesia experienced a drop in export volume in three consecutive years from 2015 to 2017 and started to regain in 2018 by an increase of 32% in its export volume. During the period, major markets for Indonesian coconut oil were Malaysia, United States, China, Netherlands and South Korea. Export volume to these five countries constituted for more than 80% of the total export. Taking advantage from lower prices and higher production, global demand for coconut oil strengthened in 2019. Imports of coconut oil by US, the largest importing country, during January-December 2019 was 0.46 million MT which declined by 3% from the previous year’s volume for the same period. However, European countries imported 0.64 million tons during the same period which was 9% higher compared the previous year’s volume. Netherlands was the main importing country in Europe. The country brought in 0.37 million tons of coconut oil during the year of 2019. Overall global import of coconut oil is estimated to rise by 3% in 2019.
In Asia, China and Malaysia were recorded as the main importing countires for the oil. China imported 0.18 million MT and malaysia brought in 0.23 million MT of the oil. Other Asian countries which had a significant demand for coconut oil were South Korea, and Japan. In the second half of 2019, price of coconut oil start to recover from a slump. In Rotterdam, price of the oil in July 2019 was US$657/MT which was higher than previous month’s price of US$636/MT. The price continued to level up and reached US$1,016/MT in December 2019 which was 28% higher than the price a year before. Similarly, price trend of palm kernel oil, another lauric oil, showed the same pattern with coconut oil. Price of palm kernel oil was US$555/MT in July 2019 which was higher than preceding month’s price. The price of palm kernel oil went up to US$945/MT in December 2019 or 28% higher compared to last year price. As the price of palm kernel oil was improving, price premium of coconut oil over palm kernel oil was shrinking. In July 2019, the premium was only US$102/MT and decreased to US$71/MT in December 2019. Price of coconut oil is expected to slow down in the first half of 2020 as premium price of coconut oil over palm kernel oil and other vegetable oils is already very high. Price of coconut oil is expected to be around USD850 – USD900 per tons.