Coconut industry still faces many challenges

Although export turnover has exceeded 1.1 billion USD per year, Viet Nam’s coconut industry has yet to secure a corresponding position in the international market. Currently, Viet Nam accounts for only about 8% of the fresh coconut market in China, the world’s largest consumer, which imported 1.1 million tons in 2025, significantly lower than Indonesia and Thailand.

Not only is Viet Nam’s coconut industry limited in market share, but its product value is also lower than that of competitors. Experts point out that the biggest bottleneck lies in inconsistent quality.

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Dr. Tran Minh Hai, Vice Rector of the School of Public Policy and Rural Development, noted that Viet Nam currently has two main types of coconuts: those for oil and those for drinking. However, in many localities, these two types are still planted together, leading to cross-pollination, reduced varietal purity, and uneven fruit quality.

The 'dragon transformation' opportunity

According to Mr. Nguyen Dinh Tung, Vice President of the Viet Nam Fruit and Vegetable Association and CEO of Vina T&T Group, one of the major challenges facing the coconut sector today is the small-scale and scattered nature of production.

Most coconut plantations are still managed by smallholder households. This makes it difficult to organize production according to standardized processes and affects the stability of supply.

“When production is fragmented, developing standardized raw material areas for large-scale exports becomes very challenging. This also complicates the processes of purchasing, sorting, and packaging products,” Mr. Tung explained.

In the context of many import markets increasingly demanding strict quality standards and traceability, small-scale production can become a significant barrier for export businesses.

Experts believe that reorganizing production under a cooperative model, linked with purchasing and processing enterprises, will be an important solution to address this issue.

Another challenge for Viet Nam’s coconut sector is logistics costs. Because fresh coconuts are heavy and take up significant container space, transportation costs to distant markets such as the U.S. or Europe are relatively high. This directly affects product prices and the competitiveness of Vietnamese coconuts in the international market.

Meanwhile, major coconut-producing countries like the Philippines, Indonesia, and Thailand have relatively complete supply chains and logistics systems, which help reduce shipping costs and improve export efficiency.

Mr. Nguyen Dinh Tung emphasized that optimizing logistics, improving storage and transportation systems for agricultural products, will be a key factor in enhancing the competitiveness of Vietnamese coconuts in the near future.

Although Viet Nam’s coconut processing industry has made significant progress in recent years, the proportion of deeply processed products still does not match its potential.

Currently, a significant portion of coconut production is still exported as raw or semi-processed materials. Meanwhile, many high-value-added coconut products, such as cosmetics, functional foods, or refined raw materials for the industrial sector have yet to be fully developed.

If investment in deep processing technology is intensified, the economic value of coconuts could increase many times compared to exporting raw materials.

Developing deeply processed products not only raises added value but also helps expand export markets and reduce dependence on raw materials.

“Viet Nam’s coconut industry is facing a ‘dragon transformation’ opportunity. To achieve this, we need closer links between farmers and businesses through clean and sustainable value chains,” Mr. Tùng shared.

Coordinated policies needed for sustainable development

In the context of international markets increasingly demanding high environmental standards and traceability, Viet Nam’s coconut sector is gradually shifting toward green and sustainable production models.

According to Mr. Cao Ba Dang Khoa, Vice President and General Secretary of the Viet Nam Coconut Association, building raw material areas that meet international standards is an inevitable trend if the industry wants to increase value and expand export markets.

“Coconut plantations need to be reorganized toward concentrated production, applying sustainable farming practices and meeting international standards such as GlobalGAP,” Mr. Khoa said.

Regarding coconut varieties, instead of traditional nursery methods, the current requirement is that varieties must have certified parent lines, clear genetic origin, and be protected and circulated according to regulations. Technologies such as tissue culture and embryo culture are being used by businesses to produce high-quality varieties for raw material areas, with the aim of participating in the carbon credit market.

In production, planting and caring for coconuts should be managed with cultivation logs, meeting strict international standards, while strengthening pest control and providing timely warnings.

In processing, businesses need to invest in harvesting technology, specialized deep processing for each product group, and utilize by-products to develop circular, environmentally friendly products, thereby enhancing value across the entire coconut industry chain.

“Many enterprises have invested in technology to fully utilize all coconut by-products, from coir and shells to coconut water, creating a variety of new products for different sectors,” Mr. Khoa noted.

According to the Viet Nam Coconut Association, the coconut industry has received increasing attention from state management agencies in recent years.

Coconut has been identified as one of the country’s key crops, and numerous trade promotion programs and international cooperation initiatives have been implemented to support businesses in expanding markets.

However, for the coconut industry to develop sustainably in the coming years, it is necessary to continue improving supporting mechanisms and policies. Local authorities need to proactively understand production data for each region, strengthen links with cooperatives and purchasing enterprises, and build stable supply chains.

At the provincial level, management agencies should continue implementing solutions to address salinity intrusion, control pests, and support farmers in applying scientific and technical advances in production.

In addition, organizing forums and workshops to exchange market information and address business challenges is also necessary.

“To ensure sustainable development of the coconut industry, there must be regular dialogue between authorities, businesses, and farmers to remove obstacles, promote production linkages, apply science and technology, leverage tourism and logistics, and strengthen trade promotion in international markets,” Mr. Khoa emphasized.

The long-term goal of Viet Nam’s coconut industry is to build a sustainable supply chain from farms to processing plants and consumer markets. This linked chain not only helps increase the value of coconuts but also ensures stable livelihoods for hundreds of thousands of households across many localities.

With the current development foundation and strong investments in technology, raw material areas, and deep processing, Viet Nam’s coconut sector is expected to continue growing and gradually become one of the country’s key agricultural export industries.