The global coconut market is facing significant supply constraints, leading to price increases and uncertainty in early 2025. A combination of weather impacts, rising global demand, and export pressures has disrupted supply chains, making it harder for businesses to secure stock. According to Global Growth Insights, these challenges are expected to persist until mid-year. Businesses are advised to plan ahead, forecast their needs carefully, and secure stock early to avoid disruptions.

Key Factors Driving the Coconut Market Challenges

Adverse Weather Conditions

• The El Niño weather pattern has led to droughts and extreme heat in major coconut-growing regions.
• Poor rainfall has significantly reduced coconut yields, impacting the supply of raw materials.

Increased Global Demand & Export Pressures

• Demand for coconut-based products continues to grow, particularly in China and the U.S., putting further strain on the market.
• As noted by CMBroker, large importers, including Thailand and China, have increased raw coconut purchases, tightening global supply.

Challenges Specific to Sri Lanka

Sri Lanka, a key coconut-producing country, is facing additional pressures that are further impacting supply:

• Monkey-Induced Crop Damage – It is estimated that monkeys and giant squirrels destroy 200 million coconuts annually, leading to major losses for farmers. Efforts to control monkey populations through sterilisation programs have been introduced to mitigate the issue.
• Whitefly Infestations – Whiteflies, which have previously affected vegetables and fruits, are now causing severe damage to coconut trees. The infestation, worsened by previous fertiliser shortages, has significantly reduced yields in northern regions.
• Fertiliser Shortages – High fertiliser costs and limited access to quality inputs have weakened coconut trees, making them more vulnerable to pests and reducing overall productivity.

While these challenges are specific to Sri Lanka, they add further strain to the global supply chain, contributing to higher prices and reduced availability in export markets.

Currency & Freight Challenges

• The weaker Australian dollar against the USD has further increased the cost of imported coconut products.
• Rising freight costs and shipping delays have added additional pressure on pricing.

A Tough Year for the Coconut Market

With shortages and price hikes shaping the first half of 2025, businesses should prepare for ongoing volatility. While improvements in supply may come mid-year, careful planning and early stock commitments will be crucial to managing the impact. These factors have contributed to rising costs for raw materials and shipping. At Kokonut Pacific, we remain committed to ethical sourcing and providing the best quality coconut products while keeping our customers informed about market developments. Thank you for your continued support.