Filipino consumers may have to pay more for coconut oil as prices are expected to rise further this year due to higher demand and global supply disruptions
Filipino consumers may have to pay more for coconut oil as prices are expected to rise further this year due to higher demand and global supply disruptions.
The Philippine Coconut Authority (PCA) said it anticipated the continued rise in coconut oil prices “in the foreseeable future.”
“The unusual price growth in coconut oil prices in early 2025 is attributable to tightening global supply and heightened demand,” the PCA said in response to inquiries from the Inquirer.
The PCA pointed out that increasing prices are triggered by supplier countries prioritizing their domestic requirements and limiting their exports.
It noted that Indonesia, for instance, is mulling over a temporary ban on coconut exports to support its domestic processing sector amid higher coconut prices.
The country has imposed a ban on palm oil exports, further driving up global prices of vegetable oil, the agency said.
Another factor is the significant impact of Russia’s invasion of Ukraine on the global supply of vegetable oils, as these countries are the largest suppliers of rapeseed and sunflower oil worldwide.
“The reduced availability of these major vegetable oils has pushed global buyers to seek substitutes like coconut oil, thereby increasing the overall demand for coconut,” the PCA said.
Despite these developments, the PCA will not consider imposing a price ceiling on domestic cooking oil at the mill-gate level.
It explained that setting a suggested retail price for coconut oil is “the least among the available options.” It noted that such a move would require government subsidy “to bridge the gap between the prevailing market price and the regulated price.”
However, the PCA said this would be considered if the upward price trend continues “to a point of significantly impacting the operations of other critical sectors such as the food and transport industries.”
It plans to discuss its options with the National Economic and Development Authority, the Department of Trade and Industry, the Department of Agriculture, the Department of Finance and other relevant oversight agencies.
The PCA also ruled out the issuance of an executive order limiting coconut oil exports.
Instead, the PCA said it would look into the viability and broader economic implications of the “percent retention” policy while engaging in talks with industry stakeholders and relevant government agencies.
Under the proposed policy, a certain portion of coconut oil production will be retained to meet local requirements, such as for biofuel blend requirements. Only after covering this will any surplus be exported.
Source: https://business.inquirer.net/520767/upswing-in-coconut-oil-prices-flagged