LPEI: Indonesia's Coconut Oil Exports Remain Resilient Amid Global Challenges

Indonesia remains the world’s second-largest coconut oil exporter in 2025. The Indonesia Export Finance Institution (LPEI), also known as Indonesia Eximbank, stated that Indonesia’s coconut oil exports have shown solid resilience amid global supply pressures and production fluctuations. An Indonesia Eximbank Institute sectoral study noted that Indonesia remains the world’s second-largest exporter of both crude and refined coconut oil in 2025, with a global market share of approximately 22%. Rini Satriani, Head of Indonesia Eximbank Institute, stated in a written statement on Saturday in Jakarta that Indonesia’s coconut oil export value continued to rise despite a decline in shipment volumes. From January to December 2025, export volumes fell by around 18%, but cumulative export value increased by over 43%. Rini explained that the rise in export value was primarily driven by price surges due to limited raw material supply. The situation was also influenced by El Niño, which caused some factories to temporarily reduce production capacity. She noted that Indonesia is behind the Philippines, which holds about 49% of the global coconut oil export market. The Netherlands is in third place with a 10% share. Amid this competition, the Indonesia Eximbank Institute assessed that Indonesia’s coconut oil export competitiveness, particularly for refined products, remains sufficiently resilient. Indonesia also benefits from export market diversification. Its coconut oil products reach over 90 countries, with major markets including the Netherlands, China, the Philippines, Malaysia, and the United States. The Indonesia Eximbank Institute believes Indonesia has further opportunities to penetrate European and non-traditional markets, given rising global demand for pure coconut oil driven by healthy lifestyle trends and natural product usage in food, cosmetics, and healthcare sectors. Overall, the Indonesia Eximbank Institute projects Indonesia’s coconut oil export value to grow moderately by around 9% in 2026. This outlook is influenced by production recovery from competitors like the Philippines and normalising coconut prices. However, the coconut oil sector still faces raw material supply challenges. National coconut production is pressured by ageing trees, low productivity among smallholder farmers, extreme weather, and rising exports of whole coconuts. Rini said replanting coconut plantations and strengthening downstream processing are crucial strategies to sustain the industry. The government has already replanted approximately 44,900 hectares in 2024 and aims to expand the replanting program in 2026-2027. Replanting and downstream processing are key strategies to ensure future raw material supply continuity for coconut oil. ‘These efforts are expected to strengthen coconut oil’s role as a sustainable potential commodity and boost future national export performance,’ Rini said.