Coconut is en route to join the billion-dollar export group

En route to hit the billion-dollar milestone

According to Mr. Cao Ba Dang Khoa, Acting General Secretary of the Vietnam Coconut Association (VCA), Vietnam's export of coconut, coconut products and coconut-related products in 2022 has reached over 900 million USD. This turnover does not include products made from coconut wood and commercial handicraft products using raw materials sourced from coconut trees.

Vietnam's coconut industry currently has over 90 products made from coconut trees that have been put on the market, including items of high economic value such as coconut oil used for healthcare and beauty purposes. Additionally, there are nearly 200 food products using coconut ingredients.

Ms. Nguyen Thi Truc Lien, Material Division Director of Ben Tre Import-Export Joint Stock Company (Betrimex), said that the Vietnam's coconut industry has great untapped potential for export. Various materials such as coconut shells, empty coconut shells, coconut copra, coconut water, etc. can be made into products that meet the needs of consumers. Furthermore, many businesses in the coconut industry are promoting investment in modern processing technology.

According to Ms. Bui Hoang Yen, Department of Trade Promotion under the Ministry of Industry and Trade, the International Coconut Community has estimated the growth rate of demand for coconut products to be at approximately 10%/year by 2025. Namely, demand for coconut milk will increase by 15%; coconut jelly by 5.6%; coconut powder by 6.6%; coconut cream by 36%; coconut water by 25%; pure coconut oil by 21%. With such substantial growth in demand in the world market, the opportunity for Vietnam's coconut industry is considerable.

Mr. Cao Ba Dang Khoa said that Vietnam's coconut industry will maintain its processing and export capacity in 2023, and subsequently raise the turnover to at least 940 to 950 million USD. Thanks to the current growth momentum, Vietnam's coconut industry is very likely to surpass the one billion USD export milestone within the next 2 years.

Stabilizing the price of coconut to maintain raw material areas

A major concern currently facing the coconut industry is the fact that raw coconut price has dropped significantly starting from the second half of 2022. The current coconut price is 10% lower compared to the lowest price in 2018. Mr. Cao Ba Dang Khoa explained that such decline was caused by the Covid-19 pandemic where many businesses' orders were halted abruptly.

Moreover, the prolonged pandemic also affected the construction progress of organic coconut areas as well as the technology application to control and distinguish the source of raw coconut. These are important factors in promoting the export of high-value coconut products, because industries that use coconut materials including pharmaceuticals, cosmetics, food, etc. require a transparent and controlled source of coconut materials.

As a result, the falling price of raw coconut mainly affects coconut from the farms that have failed to be transparent and controlled. On the other hand, raw coconut areas that have been certified as organic, controlled for raw materials still manage to maintain their prices, with some even increasing in the first and second quarters of 2023.

An important task that VCA sets for 2023 is to raise the price of raw coconut in order to stabilize the livelihood of coconut farmers, minimizing the discarding of coconut farms. Subsequently, VCA aims to maintain the raw material area, improve the value of coconuts as well as the economic efficiency of coconut farmers. The total area of ​​coconut in Vietnam is currently estimated at 188,000 hectares, with an annual output of 1.9 million tons.

"In addition to promoting exports, the coconut industry will also focus on developing the domestic market. Because multiple brands of coconut products in the domestic market will be a strong ground to certify the origin, environmentally friendly products of Vietnam's coconut industry in the international coconut market", added Mr. Cao Ba Dang Khoa.