Why Coconut Oil Is So Expensive
Narrator: Coconuts have been cultivated in tropical climates for thousands of years, and they produce some of the most expensive cooking oil, often selling for 10 times the price of canola oil when you compare leading brands. The coconut-oil industry is predicted to grow by half a billion dollars worldwide over the next four years. But with the hotly-contested health benefits some coconut-oil companies promote, should it be as expensive as it is? So what’s the truth behind coconut oil, and why is it so expensive?
Its supposedly versatility is the reason for its high price. While coconut has a long tradition of use in food and medicine across Asia, its oil is the most valuable byproduct.
Here in the Philippines, where over 44% of the world’s coconut oil is produced, coconut trees thrive in a long dry season. But even with a bounty of coconuts at your fingertips – assuming you can climb high enough – the process of extracting the oil isn’t easy.
Each coconut has a layer of husk surrounding its shell that must be removed by hand. Only then can it be cleaved in half with a special tool called a bolo knife.
Marife A. Ada: So after grating, we will now squeeze using our expeller machine. Then, after using the expeller machine, we now have collected the cream. Set aside the cream to be fermented for 12 hours on a table.
Narrator: In the Philippines, 14.8 million metric tons of coconuts were harvested in 2019 alone, and these were used to make around 1.6 million metric tons of oil – much of it exported to the US or Europe.
And by the time the coconut oil reaches the Western market, the price for the product will have roughly doubled. Even with the ideal growing conditions for the trees, coconut oil has grown so popular that farmers in the Philippines struggle to meet the demand. In recent years, the market for coconut oil has surged in the West alongside a cultural shift towards the search for natural, unprocessed products. And coconut-oil manufacturers were quick to capitalize on the sensation. Consumption peaked in the US in 2009 at 598,000 metric tons, and coconut oil quickly became the mascot for a healthy lifestyle as celebrities and bloggers adopted the product.
Proponents of coconut oil as a cure-all remedy say that it can promote weight loss, improve blood sugar, and even slow the progression of Alzheimer’s because of its high levels of antioxidants. But so far, all scientific studies on the health benefits of coconut oil have been inconclusive, and nutritionists remain skeptical. Some nutritionists say coconut oil could actually do more harm than good. Coconut oil is composed of 80% to 90% saturated fatty acid. In 2017, the American Heart Association issued an advisory against saturated fats and specifically warned that coconut oil increases cholesterol and should be avoided. And soon after, the wholesale price of coconut oil dropped by more than half.
But it’s a dip that hasn’t lasted, and coconut oil’s price is once again rising rapidly. The oil has become a key ingredient in many products, perhaps most recently alternative meats. Both Beyond and Impossible burgers are reliant on coconut oil, and their surging popularity has increased demand.
But while coconut oil’s popularity shows no sign of slowing, there’s a looming problem for the coconut supply. Some estimates say as many as 90% of all coconut trees in Asia are nearing the end of their productive cycle. The majority of coconut plantations across the Philippines were planted 40 or 50 years ago, and many of the trees are now producing as little as 10 coconuts a year, rather than the 100 to 150 a healthy tree might.
Marife A. Ada: So 250 coconuts can make up 10 liters of virgin coconut oil. So these coconuts were taken from 12 coconut trees. So for a coconut like this to mature, we harvest it every three months or quarterly.
Narrator: And the 10 liters that come from all of these coconuts would only fill up about 21 16-ounce jars of coconut oil that you’d likely find at a supermarket. Given it takes about 10 years for a new coconut tree to fruit, planting new trees is going to be crucial to keep up with this soaring demand. But despite these problems, the market is poised to grow by $518 million before 2024.