Global coconut oil production rises 7%, but market faces slower growth ahead

Global coconut oil production increased by 7% in the 2025/26 season, driven by favorable weather conditions in the Philippines, where abundant rainfall resulted in a strong coconut harvest, according to a report by LIPSA.

Higher production led to a significant recovery in global coconut oil stocks. Increased supplies pushed prices sharply lower, with coconut oil now trading about 30% below the record highs reached in June last year.

For the 2026/27 season, production growth is expected to slow significantly, with output forecast to increase by no more than 1%. At the same time, global consumption is projected to rise by 3–4%, supported by ample inventories and a shift in demand away from crude palm kernel oil (CPKO).

However, analysts warn of growing risks in the medium term. Dry weather associated with El Niño has already begun affecting the Philippines, raising concerns about future coconut yields.

According to LIPSA, the global coconut oil market could face a significant supply contraction and tighter market conditions from mid-2027 if dry weather persists across key producing regions.

Tags: coconut oil