Coconut Oil and Copra

Coconut oil and copra come from the fruit of the coconut palm tree, which originated in Southeast Asia. Coconut oil has been used for thousands of years as cooking oil, and is still a staple in the diets of many people living in tropical areas. Until shortages of imported oil developed during WWII, Americans also used coconut oil for cooking.

Copra is the meaty inner lining of the coconut. It is an oil-rich pulp with a light, slightly sweet, nutty flavor. Copra is used mainly as a source of coconut oil and is also used shredded for baking. High-quality copra contains about 65% to 72% oil, and oil made from the copra is called crude coconut oil. Crude coconut oil is processed from copra by expeller press and solvent extraction. It is not considered fit for human consumption until it has been refined, which consists of neutralizing, bleaching and deodorizing it at high heat with a vacuum. The remaining oil cake obtained as a by-product is used for livestock feed.

Premium grade coconut oil, also called virgin coconut oil, is oil made from the first pressing with out the addition of any chemicals. Premium grade coconut oil is more expensive than refined or crude oil because the producers use only selected raw materials and there is a lower production yield due to only one pressing.

Coconut oil accounts for approximately 20% of all vegetable oils used worldwide. Coconut oil is used in margarines, vegetable shortening, salad oils, confections, and in sports drinks to boost energy and enhance athletic performance. It is also used in the manufacture of soaps, detergents, shampoos, cosmetics, candles, glycerin and synthetic rubber. Coconut oil is very healthy, unless it is hydrogenated, and is easily digested.

Prices – The price of coconut oil (crude) in December 2003 was 21.00 cents per pound, little changed from the 2002 average of 21.01 cents. The 2003 price was a 13-year low going back to 20.66 in 1990. Coconut prices in 2003 were down by more than 50% from the peak of 42.42 cents seen in 1996.

Supply – World production of copra in 2003/4 was forecast at 5.38 million metric tons, up 5.3% from 5.11 million in 2002/3. Ending stocks were unchanged in 2003/4 from 2002/3 at 20,000 metric tons. World production of coconut oil in 2003/4 was forecast at 3.33 million metric tons, up 5.0% from 3.17 million 2002/3. The world’s largest producer of copra in 2003 by far was the Philippines with 41% of world production, followed by Indonesia with 26%.

Demand – Virtually all of world production of copra in 2003/4 went for crushing into coconut meal and oil (98.7%). World consumption of coconut oil in 2003/4 rose 2.2% to 3.32 million metric tons.

Trade – Copra is generally crushed in the country of origin, so exports of copra account for less than 4% of world production. However, exports of coconut oil in 2003/4 rose 7.3% to 1.91 million metric tons, accounting for 57% of world production.