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Industry, farmers lock horns on coconut export curb proposal to cool price
The proposal has drawn pushback from a farmers’ association, which says the current global price surge is a rare opportunity to maximize profits after years of depressed returns.
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A worker produces coconut-shell charcoal on Sunday at Lemo-lemo Village in Central Mamuju, West Sulawesi. Locals in the village produce up to 300 kilograms of the charcoal per day and sell it for Rp 6,500 (44 US cents) per kg to briquette factories and restaurants. (Antara/Akbar Tado)
T
he coconut processing industry is urging the government to impose at least a six-month moratorium on raw coconut exports or else local producers will have to lay off workers because of a supply crunch of the commodity as their main input.
Farmers, however, refused any export controls, saying that would trap them in a low-price environment and that current global commodity price surges provide a rare opportunity to maximize income after years of depressed returns.
Coconuts have emerged as a notable driver of inflation in recent months. While typically flying under the radar, the commodity contributed 0.02 percentage points to annual inflation in March, rising to 0.04 percentage points in April, according to official data.
In East Java, Statistics Indonesia (BPS) reported a striking 24.86 percent month-on-month jump in coconut prices in April with the commodity priced at Rp 15,303 (93 US cents) per kilogram, a 57 percent increase from the same period last year.
Eliza Mardian, a researcher at the Center of Reform on Economics (CORE), told The Jakarta Post on Friday, the recent surge in coconut prices is largely driven by rising global demand, as consumers are shifting from animal-based to plant-based milk alternatives.
The shift, driven by health reasons, also targeted coconut milk, among others. Demand has also grown for derivative products like virgin coconut oil and coconut water.
Data from BPS shows that exports of endocarp coconuts surged 50.8 percent last year, reaching US$113.6 million, with the bulk of shipments heading to China.
