Indonesia, as the world's largest coconut producer, has great trade potential. However, since last August, the commodity has experienced supply shortages and domestic price spikes. To cushion the blow, the government plans to take decisive action by halting the export of whole coconuts.
This policy aims to improve the trade system from upstream to downstream while forcing the acceleration of the coconut commodity downstream program, so that Indonesia is no longer just an exporter of raw materials that are vulnerable to fluctuations in domestic supply.
The export push of whole coconut commodities has reached its peak in recent years. Based on data from the Central Statistics Agency (BPS), the trend in the value and volume of whole coconut exports shows a significant surge, especially in 2024. The volume of whole coconut exports was at its lowest point in the 2021-2023 period, which was less than 400 thousand tons. A sharp spike occurred in 2024 which reached 624,387 tons with an increase in export value to USD 181.59 million.
This increase continued until the January-August 2025 period, where the export volume reached 491,581.2 tons. While this volume was still below the previous year, the value of exports soared to USD 214.19 million. The 17.9% increase in 2025 is the highest in the last five years.
This significant increase in exports was overshadowed by a price and supply crisis in the domestic market. Round coconuts became scarce and their prices skyrocketed, far above the normal price, with shredded coconut in the market reaching Rp20,000 - Rp25,000 per grain.
Ironically, this crisis is not due to a decline in national production. Indonesian coconut production data shows that production has been stable at over 2.8 million thousand tons per year. Aside from the gradual decline in productivity, the crisis occurred due to the diversion of domestic supply to export markets that offer much higher prices. As a result, the local processing industry, which is supposed to be the key to downstreaming, struggles to obtain raw materials.
A halt to whole coconut exports is a short-term solution to secure domestic supply. The raw material export ban is aimed at diverting the volume of whole coconuts to local processing industries, which will produce value-added products such as copra, virgin coconut oil (VCO), or packaged coconut milk.
If high export volumes (such as those in 2025) are diverted to the domestic industry, local factory capacity can operate optimally. Meanwhile, exports are diverted to higher-value processed products,
This policy to stop exports provides an opportunity to improve trade governance from upstream to downstream. In addition, efforts are also needed to map the needs and absorption capacity of the domestic industry, provide special incentives for coconut derivative products, and improve the planting system so that production capacity is known to meet both domestic and global markets.
The shift of commodities from exports to downstreaming that empowers local industries must take into account the anticipation of reducing the risk of falling coconut prices that can harm farmers. The synergy between the export ban policy and downstream support is key to achieving a balance between farmer welfare and increased national economic competitiveness.
