Coconut Oil



The coconut palm (Cocos nucifera) is commonly grown in the Caribbean and serves a multi-functional role. Both small- and large-scale production of products from the coconut palm makes an important contribution to food security.

At the industrial level, the coconut industry is an important source of employment and income in rural communities. The coconut palm also aids in the prevention of coastal erosion while providing charming landscapes that are attractive to both tourists and locals. Beyond the coastline, the coconut palm is highly demanded for landscaping and home beautification.

The coconut produces a variety of products which are consumed regionally and internationally including:

  • fresh green and dry nuts
  • copra
  • coconut oil
  • coconut water

Additionally, the coconut shell is used for various fibres, charcoal, ornamental items and other products not yet fully commercialised. The coconut fibre or coir has a variety of industrial and craft uses.

Current situation

During the 12th Caribbean Week of Agriculture (CWA) in 2013 in Guyana, a workshop entitled ‘Coconut Industry Development for the Caribbean: Towards a Shared Vision’ was held. Its objectives included agreeing on priority interventions and a Road Map for developing the Caribbean coconut industry within a three to five year period at the national and regional level. A long-term overarching vision was also elaborated as follows: ​‘To develop a highly competitive, integrated, sustainable regional coconut industry which grows 30% within 5 years and delivers benefits to all stakeholders throughout the value chain.’

The road map produced by the workshop highlighted a range of measures that needed to be taken, including, improving access to planning material, developing a quality assurance system, improving pest management, increased research tied to new niche market products, market research, and mobilizing funding for capacity building.   

Coconut Festival – October 16, 2016

The Guyana Coconut Festival is a three-day event around a coconut theme and will feature seminars and exhibitions as well as festival celebrations. It is being organised by Guyana’s Ministries of Tourism and Agriculture. Expected benefits include:

  • Diversifying the economic base of Guyana’s economy
  • Economic empowerment
  • Positive Impact on rural village economies

Demand for coconut water

The growing demand for coconut water as a beverage has shown that the coconut production has not kept pace with demand. The bottling and storage of coconut water for extended shelf life and improved marketability is still posing a serious challenge to packers.

Further, in some countries, the market is facing supply constraints, which may be due to the fact that many coconut groves in the region are aged with tall trees, thereby increasing the cost of harvesting the nuts. There is also the need to select coconut varieties specifically suited to the water nut market with respect to flavour, yield and ease of harvesting. Research & Development could also improve the yield and profitability of coconut intended for the bottled water market or coconuts intended for other uses such as oils or fibres.

Business case

Why invest in coconut production?

  • Potential exists for supplies to both the regional and export markets in the USA, Canada and European Union markets
  • These are major destinations for coconut oil and coconut products
  • Industry opportunities exist for replanting of coconut trees and research in extending the shelf life of bottled coconut water with investment


Coconut Oil


Coconut oil is consumed as food while a significant amount goes into the oleo-chemical industry. It is also used in food preparation and the soap making process.

Historically, most of the region’s coconut was converted into copra for the production of coconut oil and the residues were used for animal feed. And, according to Businessman, Dr. Raymond Trotz in a planning meeting for the 2016 Guyana Coconut Festival there are 67 proven uses for coconut oil!

Current situation

According to a report on Industry Development Strategies for the region’s coconut industry commissioned by CARICOM, in recent years a number of factors have contributed to the decline in the percentage of coconuts being converted into copra and oil. On the demand side these factors include the increasing competition faced by coconut oil from soybean and other vegetable oils. Supply side factors include the growing demand for bottled Coconut Water, the impact of disease on production and the conversion of coconut estates to built development.

The report goes on to state that only Trinidad and Tobago and Guyana have commercial scale operations to produce coconut oil – the former with one plant and the latter two. It states that according to FAOSTAT, the estimated total CARICOM production of coconut oil in 2002 was 23,000 mt with most of the production being concentrated in Trinidad & Tobago and Guyana.

According to the FAO data, Trinidad and Tobago produced approximately 7000 mt, Guyana 2,000 mt and Jamaica 5,000 mt. St Lucia, St Vincent, Suriname and Belize each produced an estimated 1000 mt, all through cottage scale operations. The FAO regional estimate of coconut oil production are likely underestimates since a significant volume of coconut oil is produced at the household or cottage scale level throughout the region.

Renewed interest in coconut oil

According to The Coconut Industry Market Intelligence Report which was commissioned as part of the CARICOM Regional Transformation Programme for Agriculture, the high price of petroleum-based fuel has brought about a renewed interest in the use of coconut oil for conversion into bio-fuel with the main focus being on the on the commercial products from the regional Industry.

Coconut oil prices increased to US $674 / tonnes in 2004 from a low of US $324 / tonnes in 2001. The Caribbean produced an average of 512,000 tonnes of coconuts annually over the period 1990/2002 with CARICOM accounting for 301,000 tonnes or 59%.

Major production was as follows:

  • Jamaica - 170,000 tonnes (56%)
  • Guyana - 59,000 tonnes (20.6%)
  • Trinidad and Tobago - 23,000 tonnes (8%)

Despite this, CARICOM remains a net importer of oil for table consumption and industrial use.

The industry had faced some constraints which had resulted in the loss of market share. Principal among these was the suspected adverse health and nutrition effects on humans but studies, such as that conducted by Spade and Dietchy (1988), have shown that coconut oil prevents the formation of hepatic cholesterol esters

In addition, the lauric acid found in coconut oil provides the disease fighting fatty acid monolaurin which boosts the immune system. Although this controversy was not sustained, supplies of coconut oil in the global market remained at low levels due to the effect of pests and diseases on production.

Now however, according to an April 2016 article in the Wall Street Journal (WSJ), coconut oil prices soared nearly 20% in a month, largely because of the growing popularity of specialty products such as coconut water. “In supermarkets, coconuts are being sold with pull tabs to be drunk like beer. Coconut sugar is being touted as healthier for diabetics. And U.S. actress Gwyneth Paltrow is among celebrity coconut fans, once revealing she swishes around virgin coconut oil for oral health and whitening her teeth,” the article noted.

The Coconut Industry Market Intelligence Report  adds that apart from the use of coconut oil in cooking and as a dietary supplement, it is reported to have tremendous cosmetic benefits as well. Coconut oil is said to relieve dry skin and restores the youthful look to skin by aiding the removal of the outer layer of dead skin cells making skin appear smoother. Continued use of coconut oil may also improve the texture of skin.

Business case

Why invest in coconut production?

  • Potential exists for supplies to both the regional and export markets in the USA, Canada and European Union markets
  • These are major destinations for coconut oil and coconut products



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