Coconut Oil Market Faces Slowing Growth Amid El Niño Risks

Global coconut oil production has increased by 7% in the 2025/26 season, thanks to favorable weather conditions in the Philippines. The country's abundant rainfall led to a strong coconut harvest, driving up production and pushing global stocks back to pre-record levels.

The increased supplies have sent prices sharply lower, with coconut oil now trading around 30% below its record highs reached in June last year.

However, the market is expected to face slower growth ahead. Production growth for the 2026/27 season is forecasted to increase by no more than 1%, while global consumption is projected to rise by 3-4%. This widening gap between supply and demand could lead to tighter market conditions.

Analysts are warning of growing risks in the medium term, citing dry weather associated with El Niño that has already begun affecting the Philippines. If dry weather persists across key producing regions, the global coconut oil market could face a significant supply contraction from mid-2027.