JAKARTA – Indonesia has reaffirmed its role as the world’s second-largest exporter of coconut oil, despite facing production challenges in 2025.
According to the Indonesia Eximbank Institute, the country’s export value surged by more than 43 percent last year, even as shipment volumes fell due to climate-related disruptions.
Export Performance in 2025
Indonesia accounted for 22 percent of global coconut oil exports, maintaining its position behind the Philippines, which dominates with nearly 49 percent of the market.
Export volumes from Indonesia dropped 18 percent year on year, largely due to reduced domestic production capacity. Yet, higher global prices driven by supply shortages helped boost overall export earnings.
The country shipped coconut oil to more than 90 destinations worldwide, with major buyers including the Netherlands, China, the Philippines, Malaysia, and the United States.
This diversification has helped Indonesia cushion the impact of falling volumes.
Price Surge and Market Drivers
Global coconut oil prices rose sharply in 2025, fueled by limited raw material supply and the effects of El Niño, which disrupted harvests across Southeast Asia.
The price rally benefited Indonesia, allowing exporters to earn more despite smaller shipments.
At the same time, demand for sustainable and natural products particularly virgin coconut oil has grown in Europe and North America.
The oil is increasingly used in food, cosmetics, and health industries, giving Indonesia an edge in premium markets.
The Indonesia Eximbank Institute projects a 9 percent growth in export value for 2026.
Expansion into nontraditional markets and sustainability focused regions such as the European Union is expected to drive future gains.
However, risks remain. Climate volatility continues to threaten production stability, while Indonesia’s reliance on high global prices leaves exporters vulnerable to market corrections.
Competition from the Philippines also poses a structural challenges.
Indonesia’s resilience in the coconut oil trade underscores its ability to leverage diversified markets and sustainability trends even in the face of climate shocks.
The country’s performance highlights both the opportunities and vulnerabilities of commodity dependent economies navigating global supply chain disruptions.
