Indonesia targets global leadership in value-added coconut exports
Indonesia is implementing a comprehensive downstreaming strategy to transform its position as the world's largest coconut producer into dominance in high-value processed coconut products, targeting a global market projected to reach up to $55 billion by the mid-2030s.
Indonesia targets global leadership in value-added coconut exports
Indonesia is advancing an ambitious strategy to leverage its position as the world's largest coconut producer by becoming a leading exporter of value-added coconut products, National Development Planning Minister Rachmat Pambudy announced during a webinar on Wednesday.
"We do not only aim to have net exports, but also strive to become the main exporter of coconut-based products and their derivatives, enabling us to generate the highest possible added value," Pambudy stated.
The initiative comes as Indonesia seeks to capitalize on a rapidly expanding global market for coconut products, valued at approximately $26-28 billion in 2026 and projected to grow at rates between 6.9% and 10.1% annually to reach $37-55 billion by the mid-2030s. This growth is driven by rising demand for plant-based alternatives, health-conscious consumers, and diverse applications across food, cosmetics, and industrial sectors.
Strategic downstreaming roadmap
Under the 2025-2045 National Long-Term Development Plan, coconut has been designated a strategic national commodity expected to strengthen the country's industrial structure. The government has formulated a corresponding 2025-2045 Coconut Downstreaming Roadmap to guide the transformation.
Downstreaming involves converting raw coconuts into higher-value products through extraction, concentration, drying, and bioprocessing. These products include copra, coconut oil, desiccated coconut, coconut milk, coconut sugar, nata-de-coco, coconut vinegar, and coconut-based beverages, which generate substantially higher economic returns than raw coconut exports.
The minister emphasized that the government is supporting industry development through various financing schemes, research initiatives, innovation programs, standardization efforts, and fiscal incentives. The strategy also focuses on expanding production capacity, strengthening human resources, securing energy sources, and improving supply chains to enhance global competitiveness.
Production and export landscape
Indonesia produces approximately 17-18 million metric tons of coconuts annually, representing about 27-30% of global production. According to data from the Indonesian Coconut Processing Industry Association (HIPKI), national production in 2025 reached an estimated 15 billion nuts.
Approximately 98% of this production comes from smallholder farmers who cultivate coconuts on more than three million hectares of land, supporting the livelihoods of millions of rural Indonesians. Of the total production, around 9 billion nuts—or 60%—were processed into derivative products such as copra, desiccated coconut, and coconut milk, while approximately 4 billion nuts, or 26.7%, were exported in raw and whole form.
Indonesia already ships coconuts and derivatives to over 100 countries, totaling 1.09 million tons in 2024 across 22 different product types. The export value of Indonesia's coconut industry reached an estimated $2.48 billion last year.
Key export markets
China has emerged as Indonesia's largest and fastest-growing market for coconut exports, absorbing large volumes of raw and semi-processed products. In June 2025, China accounted for $24.64 million in exports, representing 15.78% of Indonesia's total coconut export value.
The European Union remains another major destination, accounting for approximately 28-30% of Indonesia's processed coconut exports by value, with the Netherlands serving as a key entry point. Other significant markets include the United States, Japan, South Korea, and the United Arab Emirates.
However, export performance has shown volatility. While Indonesia recorded its highest export volume of 1.45 million tons in 2023, supported by a 0.8% production increase, export values decreased by 41.06% between May and June 2025, reflecting fluctuations driven by global pricing, production levels, and weather conditions.
Competitive landscape
Indonesia faces competition in the global coconut products market, particularly from the Philippines in certain processed categories. Global coconut oil production in 2026 is projected at approximately 3.5 million metric tons, with the Philippines expected to export around 1.25 million metric tons of coconut oil alone.
Pambudy noted that global demand for coconut-based products is expected to continue rising across food and beverages, health, cosmetics, textiles, and biofuels sectors. In the medium term, downstreaming efforts will focus on increasing productivity, diversifying products, and boosting sustainable utilization of the coconut industry to capture a larger share of this growing market.