The global coconut oil market is estimated to be valued at USD 5.4 billion in 2022. It is projected to reach USD 7.5 billion by 2027, recording a CAGR of 5.5% during the forecast period. Coconut oil is a yellowish-white solid or semi-liquid available in the form of edible oil. It is extracted from the wick, meat, and milk of the coconut palm fruit, has a low percentage of unsaturated fatty acids, and is up to 90% saturated fat with no cholesterol content. The types of coconut oils available in the industry can be classified as RBD, virgin, and crude, serving various applications in the fields of food & beverages, cosmetics, pharmaceuticals, and many others.
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Opportunities: Potential application as biofuel
Biofuel is produced through a chemical reaction called trans-esterification or alcoholysis. This reaction occurs between alcohol, such as methanol and vegetable oil in the presence of a catalyst, such as sodium or potassium hydroxide. The reaction then yields a biofuel with many similar properties to conventional diesel fuel. Coconut oil blends yield a very comparable output of energy as conventional diesel. At the same time, coconut oil exhaust contains far fewer harmful emissions than conventional diesel exhaust. Coconut oil in Pacific countries is increasingly used in transport and electricity generation owing to its lower local cost. Other benefits include the support of local agro-industries and a decrease in emissions. The adaptation of biofuel produced from coconut oil in different countries presents ample opportunities for the players in the market.
Challenges: Irregularity in the supply of raw materials
Coconut oil is made from copra and fresh coconut meat. Being a naturally produced fruit in farms, coconut production is vulnerable to several factors, such as diseases and floods, which may decrease its production. It could negatively impact the supply of copra and fresh coconut meat required to produce coconut oil. India is one of the largest producers of coconuts in the world. However, according to the Union Agriculture Ministry, the production of coconut in India shrunk by 10% year-on-year in 2018–19 to its lowest level in the past four years. Coconut production fell to 21,384 million nuts, compared to 23,798 million nuts in 2017–18. This slump has been attributed to erratic weather patterns of heavy rains and drought and general neglect of the crop, especially in Kerala, the top coconut producer in India.
According to the Coconut Development Board statistical officer, Vasanthakumar, inadequate rains in Karnataka led to a high incidence of pests and diseases, resulting in the worst productivity decline of 31%. Thus, these factors affect the production of coconut, and there is a challenge of irregularity in the supply of raw materials.
By application, the food & beverages products segment is projected to account for the largest market share during the forecast period
By application, the food & beverage segment is projected to account for the largest market. Food and beverages include bakery & confectionery, snacks and cereals, beverages, soups, salads, sauces, and other food & beverage applications. Coconut oil adds nutritional & functional value to the final food products. It also has a high smoking point, making it a preferable choice among food product manufacturers.
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By nature, the conventional segment is projected to account for a larger share of the coconut oil market during the forecast period
The conventional segment is projected to dominate the coconut oil market by 2027. Conventional farming has higher productivity as compared to organic farming. Moreover, the lack of knowledge regarding ways to shift to organic farming and the red tape involved in acquiring organic certification has supported conventional coconuts farming.
Key players in this market include Cargill Incorporated (US), ADM (US), Bunge Limited (US), Mangga Dua (Indonesia), Greenville Agro Corporation (Philippines), Royce Food Corporation (Philippines), Novel Nutrients Pvt. Ltd. (India), Aromaax International (India), Adams Group (US), Connoils LLC (US), Tantuco Enterprises, Inc. (the Philippines), Celebes Coconut Corporation (Philippines), CIIF OMG (Philippines), Aluan (Indonesia), Sun Bionaturals Private Ltd (India), Bo International (India), Shree Western G & C Ind. (India), Rmayra Naturals (India), Jiangxi Planty Manor Health Industry Co., Ltd. (China), and Hancole (Philippines).
