Copra Prices Explained

Generally, copra prices move along with other oils such as palm oil as it is the biggest traded international oil.

Here are the top reasons for copra price variations.

Why are copra prices fluctuating?

1. Availability of Substitutes

If alternative oils like palm, soybean, or sunflower oil become more affordable or show less volatility than copra, consumers and businesses can adjust their preferences. Thus, this shift affects copra prices.

Overall, this change in demand impacts the copra market and causes changes in its value for the product in general.

2. Weather Conditions

Weather variations such as monsoons or droughts can have a major effect on coconut production.

For example, unfavorable weather has the potential to reduce yields which disrupts the regular supply of coconuts, hence lowering their availability in the affected region. Thus, copra prices may rise as a result of this shortage.

3. Pests and Diseases

Diseases and pests can affect the quality of copra and its byproducts.

For instance, lower-quality copra contains less oil or requires further processing to reach set quality standards.

Therefore, this property takes a hold on copra prices as buyers are willing to pay less for copra that has a lesser quality.

4. Government Policies

Government regulations concerning the import and export of copra and coconut products always have an impact on the dynamics of their prices in the worldwide market.

For example, tariffs or export restrictions reduce the amount of copra available on the global market, ultimately disrupting its prices. On the other hand, export-oriented policies may increase demand and have different effects on its prices.

Which variables impact the price of copra?

• Availability of Substitutes
• Seasonal Factors
• Pests and Diseases
• Government Policies
• Market Speculations
• Coconut Trends

Where does copra come from?

Copra is a great food source as it has nutritional value, offering important proteins, vitamins, and minerals. Additionally, it is the byproduct of coconut oil extraction.

Furthermore, Asia-Pacific is the largest region in the world producing copra meal. Its production process involves several steps:

1. Harvesting – When the coconut palm trees reach maturity, the coconuts are harvested.

2. Dehusking – Second, the outer husk of the coconut is removed to expose its hard and woody shell.

3. Breaking – Third, the hard coconut shell is broken to extract the coconut kernel, an important part used to produce copra.

4. Drying – Next, the kernel is dried to remove some of its moisture content. Additionally, drying is done artificially or naturally depending on the scale of the operation.

5. Storage – Once dried, the copra is stored in a cool and dry place to prevent moisture absorption and spoilage.

6. Milling or Crushing – To extract coconut oil, the dried copra is either physically pressed or extracted using a solvent.

In mechanical pressing, workers use an expeller press to get the oil. Conversely, solvent extraction uses chemicals to dissolve the oil from the copra.

7. Refining – Finally, the extracted oil undergoes a series of refining procedures to get rid of contaminants and boost its quality.

Top Copra Applications

Copra meal is a byproduct of extracted coconut oil from dried coconut kernels.

It is used as a feed ingredient in animal nutrition owing to its rich fiber and protein content, containing approximately 20% protein and providing essential amino acids that are crucial for animal growth. Some of the industrial application of copra includes:

1. Cooking oil – Numerous countries such as the Philippines and EU-27 use coconut oil as cooking oil.  Additionally, many tropical and subtropical countries utilize this for margarine, shortening, and baking goods.

2. Cosmetics – Coconut oil is commonly used as a primary ingredient in various cosmetic products such as moisturizers, lip balms, hair conditioners, and sunscreens due to its moisturizing, antibacterial, and antioxidant qualities.

3. Soap – A major source of fatty acid, it is also essential in making soaps due to its cleaning and lathering properties. Furthermore, the firmness and resistance to oxidation of soap are improved by the use of coconut oil.

4. Biodiesel – Through a process known as transesterification, coconut oil can be transformed into biodiesel, a sustainable and eco-friendly fuel. Thus, it’s possible to expand the manufacturing of biofuel using copra.

5. Animal feed – Coconut oil cake, a byproduct from coconut oil extraction from the copra is left over and provides significant protein and energy to many animals.  It can be fed either alone or can be combined with other feeds to cattle, sheep, goats, pigs, poultry, and fish.

What is the future price of copra?

The need for alternative feeds such as copra meal, to meet the growing demand for animal products is driving copra meal’s growth in the animal feed industry.

Furthermore, the demand for foods produced from animals such as meat, eggs, and milk, is increasing globally and is now greater than plant-based foods, such as cereals.

Overall, the estimated prices of copra will reach $0.70 to $1.86 per kilogram in 2028.