JAKARTA: The Indonesian Coconut Processing Industry Association (Hipki) has said fresh coconut exports, particularly to China, are absorbing a large proportion of the national output, leaving little for local manufacturers despite signs of improving coconut production.
Hipki deputy chairman Amrizal Idroes said the value of fresh coconut exports in July amounted to around US$52mil, up almost 150% year-on-year (y-o-y).
“Most of the increased production is sold as raw material abroad, especially to China,” he told Kontan on Monday.
Exports of processed coconut products also showed strong growth. Shipments of desiccated coconut rose more than 85% to US$32mil, while coconut milk exports climbed to nearly US$36mil, up around 50% y-o-y.
Desiccated coconut is coconut meat that has been grated or shredded and then dried. However, coconut water concentrate exports fell by 32% y-o-y to just US$2mil, with processors unable to secure enough of the fruit.
“Coconut water processors are running short of supply, because most fresh coconuts have already been exported,” Amrizal explained, noting mounting pressure on coconut-based industries Amrizal said only efficient and fully integrated companies, those capable of producing oil, milk, activated carbon and coconut water from each nut, could survive in today’s market environment.
Meanwhile, companies that relied on only one product, such as desiccated coconut, were much more vulnerable to production halts.
To strike a balance, Hipki has proposed an export levy on fresh coconuts. A draft regulation is being prepared, but no final decision has been announced.
“If the levy is imposed, farm-gate prices will inevitably fall below 4,500 rupiah to 5,000 rupiah.
The government is calculating whether farmers can absorb that impact,” he added.
Amrizal emphasised the need for replanting programmes, efficiency improvements and tighter integration of processors and farmers.
Many of Indonesia’s coconut trees are old and declining in productivity, making replanting critical to sustaining the sector.
Previously, Trade Minister Budi Santoso noted that most coconuts were shipped to China.
“When exported, fresh coconuts fetch high prices. Domestically, the price is low. Naturally, farmers choose to export,” said Budi when met at the Trade Ministry office, as quoted by Tempo.
Coordinating Food Minister Zulkifli Hasan made clear that the government would not halt exports despite industry complaints.
“Farmers are making good money right now, which is positive. The solution is to plant more,” he said in May at the World of Coffee 2025 exhibition.
Indonesia, the world’s second-largest coconut producer with 2.83 million tonnes in 2023 and exports worth US$1.55bil, has faced mounting pressure as ageing trees, raw material shortages and surging exports have forced dozens of processors to shut since late 2024. — The Jakarta Post/ANN
