The global lauric oils market— coconut oil (CNO) and palm kernel oil (PKO)—experienced heightened volatility during 2025, reflecting a combination of supply-side constraints and resilient downstream demand. Adverse weather conditions in major producing countries, particularly those linked to El Niño, disrupted coconut production and constrained raw material availability. At the same time, sustained industrial demand from the oleochemical, food, and biofuel sectors supported firm prices, resulting in a notable divergence between export volumes and values across key markets

Coconut oil production in Southeast Asia, especially in the Philippines and Indonesia, was significantly affected by prolonged dry spells that reduced coconut yields and limited milling operations. These supply disruptions tightened global availability, contributing to elevated price levels throughout most of 2025. Despite lower shipment volumes, exporters benefited from strong international prices, underscoring the structural tightness in the lauric oils market during the review period.

The Philippines, the world’s leading exporter of coconut oil, recorded a sharp contraction in export volumes between January and November 2025. Shipments declined by 15.3 percent to approximately 1,251,619 metric tons, reflecting reduced nut availability and lower crushing activity. However, export earnings increased markedly by 35.6 percent year-on-year, highlighting the extent to which higher prices compensated for lower physical volumes. This divergence between volume and value illustrates the sensitivity of the coconut oil market to supply shocks and reinforces the Philippines’ continued influence on global price formation despite production challenges

Indonesia exhibited a broadly similar pattern. Coconut oil exports declined by 19 percent to 488,821 metric tons during January–November 2025. Nevertheless, export revenues rose sharply by 45.7 percent, supported by strong international prices and firm demand. In addition to weather-related production constraints, Indonesia’s coconut oil exports were also affected by rising domestic consumption, particularly from the oleochemical industry, which absorbed a larger share of available supply. In contrast, palm kernel oil exports from Indonesia increased moderately in volume by 7.6 percent, while export value surged by more than 73 percent, reflecting substantial price appreciation. Overall, Indonesia’s total lauric oil exports declined marginally in volume by 1.1 percent, yet total export value expanded by over 63 percent, confirming the strength of the global lauric oils market amid constrained supply conditions.

On the demand side, industrial consumption of lauric oils remained resilient throughout 2025. The oleochemical sector continued to be a key driver, particularly in Europe and North America, where manufacturers rely on coconut and palm kernel oils as renewable feedstocks for surfactants, detergents, and personal care products. In addition, growing interest in bio-based and sustainable raw materials further supported demand, partially offsetting the impact of higher prices on consumption volumes.

In the European Union (EU27), imports of coconut oil declined by 9 percent to approximately 750,000 metric tons during January–October 2025. Despite the reduction in volume, the value of coconut oil imports increased dramatically by 81.3 percent, reflecting the sharp rise in prices. Higher coconut oil prices also encouraged substitution toward palm kernel oil, whose imports rose by 11.1 percent in volume and 21.4 percent in value. As a result, total lauric oil imports into the EU remained broadly stable in volume, contracting by only 0.3 percent, while total import value increased by more than 53 percent. The Philippines and Indonesia continued to dominate the EU market, jointly accounting for over 85 percent of lauric oil supplies, reinforcing their strategic importance to European downstream industries.

The United States exhibited a slightly softer demand profile compared to the European Union. Total U.S. imports of lauric oils declined by 2.9 percent during January–October 2025, driven primarily by a significant reduction in coconut oil imports. Coconut oil volumes fell by over 20 percent, reflecting both high prices and some degree of substitution. Nevertheless, the value of coconut oil imports increased by more than 30 percent, underscoring the continued strength of prices. In contrast, palm kernel oil imports expanded in both volume and value, supported by robust demand from the surfactant and detergent industries. Overall, while total import volumes declined modestly, the value of U.S. lauric oil imports increased substantially, indicating sustained underlying demand despite supply constraints and elevated prices

Price developments were a defining feature of the lauric oils market in 2025. Coconut oil prices increased sharply during the first three quarters of the year, rising from approximately USD 1,976 per metric ton in January to a peak of USD 2,742 per metric ton in August, representing an increase of nearly 39 percent. Prices subsequently eased toward the end of the year, falling to around USD 2,285 per metric ton in December, as market participants adjusted to demand rationing and expectations of gradual supply improvement. Palm kernel oil prices followed a similar, though less pronounced, trajectory, increasing by about 15 percent from January to September before moderating toward year-end. The overall price strength was underpinned by supply shortages in Southeast Asia, firm industrial demand, and the expanding use of lauric oils as sustainable alternatives to petroleum-based inputs.