Fresh coconut prices increased by about 110-120%, while raw coconut prices increased by 150% compared to the same period last year.

Highest fluctuations in coconut prices ever

According to a survey, raw coconut prices in Ben Tre are being purchased by traders at prices ranging from 180,000 VND to 190,000 VND/10 fruits. This is considered the highest purchase price of coconuts to date in Ben Tre. However, many traders complain about difficulties in accessing raw materials.

According to traders, the reason for the shortage of goods is that it is currently the time to buy dry coconuts (off-season), so the output of raw coconuts has decreased by more than 50% compared to before. On the other hand, the production demand of companies is currently high, the limited supply has caused the price of coconuts to increase. In addition, the prices of by-products around coconuts have increased simultaneously, such as: coconut water, coconut shells, coconut fibre, coconut peat, etc., which has partly caused the price of coconuts to increase to a record level. Currently, traders are searching all over the coconut gardens to buy, however, there is not enough output to supply the market.

Ben Tre has about 80,000 hectares of coconuts, accounting for about 42% of the coconut area of the whole country and about 88% of the coconut area in the Mekong Delta with an average output of over 700 million fruits.

According to Cao Ba Dang Khoa, Vice President and General Secretary of the Vietnam Coconut Association, the reason for the recent increase in coconut prices is partly due to the fact that we have opened our export markets to China and the US. This has created a domino effect with many other markets.

For example, when the US market opened, EU countries also opened, many retailers increased their search for Vietnamese coconuts. This has shifted consumer demand, including Chinese consumers. If in the past, they used Philippine and Thai coconuts, now they have switched to trying Vietnamese coconuts and prioritise using Vietnamese coconuts more.

Khoa also analysed that the current price of raw coconuts has increased by 150% compared to the same period last year because in previous years, the price of raw coconuts was unstable, there was a good harvest, but the price dropped, and the export market mainly exported raw coconuts through unofficial channels.

But this year, prices have increased sharply, so instead of buying raw materials, many Chinese investors have returned to invest in deep processing in Vietnam, processing coconut milk, frozen coconut water, etc. and many other semi-raw products, from which they export to the Chinese market.

Currently, Vietnam has about 16 foreign factories and 35 Vietnamese factories that deeply process raw coconut products.

Currently, traders are searching all over the coconut gardens to buy, however, there is not enough output to supply the market.

On the other hand, Indonesia, which has the largest coconut production in the world, has now begun to impose taxes on exported raw coconuts. According to the roadmap, this year the country will ban the export of raw coconuts to give priority to domestic factories to promote deep processing. This information makes deep processing investors move, looking for markets with potential and sustainable raw material areas, such as Vietnam, Thailand, etc.

Meanwhile, Vietnam is still leaving open tax policies for exported raw coconuts. Therefore, markets such as India, Pakistan, Sri Lanka, China, and most of all Thailand are focused on purchasing raw coconuts from Vietnam, causing prices to increase.

Urgently planning coconut growing areas

The recent increase in coconut prices has both created an opportunity to promote the development of the Vietnamese coconut industry and clearly revealed current shortcomings in the planning and development of growing areas.

The General Secretary of the Vietnam Coconut Association said that Vietnam currently has no planning for coconut growing areas. The growing areas are mainly spontaneous, whoever wants to grow whatever type of coconut they want, this leads to inconsistent purchasing, while exporting goods requires consistent products, which leads to weak competitiveness for Vietnam.

“With large export coconut orders, businesses are also very “nervous” because the purchasing of fresh coconut raw materials is unstable. There are places where they grow Siamese coconut, some places grow fire coconut, some places grow pineapple coconut, etc., making exports difficult. The fact that an export container has 2-3 types of coconut in it makes the taste, touch, and smell different, this reduces the competitiveness of fresh Vietnamese coconut in the world market,” Cao Ba Dang Khoa shared.

The Vice President and General Secretary of the Vietnam Coconut Association said that currently, if enterprises invest in raw material areas themselves, the capital is too large, and if they join hands with farmers, enterprises are worried about the situation of “breaking the deal”.

Therefore, to improve the competitiveness of the coconut industry, Khoa also noted that the Vietnam Coconut Association is coordinating with other parties to provide preferential credit packages and separate utilities for farmers, cooperatives, purchasing facilities, and the coconut industry business community (more than 600 enterprises).

The programme is expected to be piloted in 5 provinces including: Tien Giang, Ben Tre, Vinh Long, Tra Vinh and Soc Trang, then widely deployed to the eastern, western, and central provinces.

Khoa also shared that this is to provide a stable source of domestic coconut materials for businesses that are producing and processing coconuts; exploit potential raw material areas to ensure a stable livelihood for coconut growers across the country; exploit the potential value of craft villages and cooperatives to act as a bridge to provide stable raw materials and pre-processed materials for manufacturing businesses.

It also aims to contribute to maintaining raw material areas (based on financial support from banks) and businesses can rest assured to produce high-value products, thereby, limiting the export of raw materials with low value; at the same time, limiting the situation of good harvest, low price, good price, bad harvest, he noted.