Coconut price surge a chance to aid Southeast Asia's small farmers
Southeast Asia is in the grip of a coconut fever. Indonesia saw coconut prices increase by 57 per cent year on year in May, and the same has been true in the Philippines since late 2024. Prices have more than doubled in both Thailand and Vietnam. This surge was driven by an increase in coconut exports, particularly to China.
As a home to several of the world's
coconut powerhouses , the price surge represents both opportunity and crisis for Southeast Asia. The region's aggressive export push has succeeded beyond expectations. Unfortunately, this export-driven price surge, while representing an opportunity, has helped create domestic shortages.
At the same time, 98 per cent of all coconut production in the region is contributed by smallholders who face a dilemma of their own. Many lack the resources to capitalise on the price surge. Ageing trees require replacement, but new palms take years to reach full production. Without sufficient financing, better agricultural practices and protection from exploitative middlemen, even historically high prices will fail to lift many smallholders out of poverty.
The disconnect between commodity prices and smallholders' welfare reveals a fundamental injustice plaguing the industry. Most of the industry is smallholders who manage less than two hectares. They earn little and, after spending on inputs, labour and transport, have even smaller profits.
This systemic undervaluation stems from decades of neglect. Unlike staple crops such as rice or lucrative exports
such as palm oil , the coconut has historically been treated as the unloved orphan of Southeast Asian agriculture.
The contrast with palm oil is particularly stark. Indonesia's palm oil industry receives substantial government subsidies, tax breaks and investment. These advantages, coupled with palm oil's higher yields per hectare, have driven rapid expansion which directly threatens coconut cultivation.
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