How has Vietnam’s coconut industry grown to become a global player?
While traditional leaders like Indonesia, the Philippines, and India have long dominated the global desiccated coconut market with their abundant supplies and large-scale production, Vietnam has rapidly emerged as a significant player. Initially, Vietnam’s coconut industry started its growth in 1995 with modest export turnover, primarily from Ben Tre, the heart of the country’s coconut industry. However, Vietnam strategically adapted by focusing on high-value, processed products like desiccated coconut, virgin coconut oil, and coconut milk, which now drive its impressive growth.
Vietnam’s coconut industry began its growth in 1995. Although initially slow compared to regional neighbours, Vietnam quickly adapted by focusing on value-added products like desiccated coconut, virgin coconut oil, and coconut milk. In the early years, Vietnam’s coconut export turnover was modest, around 4.24 million USD, primarily from Ben Tre, known as the heart of the country’s coconut industry.
Since 2010, the Vietnamese coconut industry has experienced rapid growth, averaging 15-20% annually. This growth is driven by expanding production, the application of modern technology, and a strong export focus. Vietnamese companies have increasingly prioritized product quality to meet rigorous international standards. As a result, export turnover surged from 180 million USD in 2010 to over 900 million USD in 2023. Key products like desiccated coconut have gained significant market share in countries such as the US, EU, China, and Japan.
In 2024, the Vietnamese coconut industry is expected to reach a major milestone, with export turnover forecast to exceed 1 billion USD. This achievement highlights Vietnam’s growing influence in the global coconut market and underscores the relentless efforts of businesses and farmers to promote Vietnamese coconut products internationally. Products such as desiccated coconut, virgin coconut oil, and processed coconut goods are poised to continue driving export growth.
In the first 10 months of 2024, Ben Tre, the largest coconut-producing province in Vietnam, with 70% of the country’s coconut area, harvested 602,542 tons, of which 80% was dried coconut.
From its modest beginnings, Vietnam has emerged as a strong competitor in the coconut industry, directly challenging dominant regional players. This growth not only boosts the economy but also creates jobs and improves the livelihoods of millions of coconut farmers throughout the country.
Which countries are the biggest importers of fresh and dried coconut?
In 2023, China emerged as the leading global importer of fresh and dried coconut (HS 080110), with a substantial import value of $618.95 million and a volume of 1.22 billion kg. This strong demand is fueled by China’s domestic consumption and its expanding food and cosmetics industries, reflecting a growing preference for natural and nutritious products. Following China, the European Union (EU) ranked second, importing $157.48 million worth of coconuts, while the United States secured the third position with imports valued at $141.42 million.
The European Union (EU) ranked second, importing $157.48 million worth of coconuts, totaling 104.41 million kg. EU demand is centered around high-quality, organic, and sustainable coconuts for the food industry, particularly for products like coconut milk, coconut oil, and confectionery ingredients. This market requires exporters to meet stringent quality standards and certifications.
The United States followed closely in third place, importing $141.42 million worth of coconuts, with a volume of 103.64 million kg. U.S. consumers increasingly favor natural and healthy products, positioning coconut as a popular choice. Coconut is not only used in food but also in cosmetics and pharmaceuticals, thanks to its antioxidant and antibacterial properties. The U.S. also has the potential for processed coconut products like canned coconut water and virgin coconut oil.
The Netherlands, a major European logistics hub, imported coconuts worth $71.30 million, totalling 45.11 million kg. It serves as a key distribution point for European markets. The Netherlands demands value-added coconut products like desiccated coconut and coconut oil for food and cosmetic applications. Malaysia, despite a lower import value of $58.04 million, had a high import volume of 279.78 million kg. This highlights Malaysia’s focus on raw coconut imports to support its growing coconut processing industry. Malaysia uses these imports to produce coconut oil, coconut flour, and canned coconut water, serving both domestic and export needs.
What types of dried coconut products does Vietnam export?
Vietnam’s coconut processing industry offers a diverse range of dried coconut products, serving both domestic and international markets across various industries, from food production to cosmetics. These value-added products have become key exports for the country, showcasing Vietnam’s focus on quality and versatility. The main types of dried coconut produced in Vietnam include desiccated coconut, coconut chips, coconut shreds, sliced coconut, fresh coconut meat, whole dried coconut, coconut flour, and coconut meal.
1. Desiccated Coconut
Desiccated coconut is the flagship product of Vietnam’s coconut processing industry, playing a significant role in export revenue. The process involves separating the coconut meat from the shell, shredding it into small fibers, and drying it to preserve its natural flavor and extend shelf life. Desiccated coconut is widely used in the food industry, especially in confectionery, ice cream, beverages, and coconut-based jams. Vietnam is a major supplier of desiccated coconut to international markets like the US, Japan, Europe, and Southeast Asia. Its long shelf life and ease of transportation make it a favoured product for global food manufacturers.
See more: Desiccated Coconut Production: Ensuring Quality and Safety
2. Coconut Chips
Coconut chips, thin slices of fresh coconut meat that are dried, have gained popularity as a high-end snack. These chips are available in various flavours, such as sweet, salty, or spiced, offering a nutritious snack option. Coconut chips are increasingly popular in markets demanding organic and natural foods, such as the US, Canada, Europe, Japan, and Korea. This product has seen strong growth in export markets due to its appeal as a health-conscious snack.
3. Coconut Shreds
Coconut shreds are made by grinding fresh coconut meat into small pieces and then drying them. They are commonly used as ingredients in the confectionery, dessert, and ice cream industries, as well as for seasoning traditional dishes. Additionally, shredded coconut is integral to the coconut oil production industry, where the dried meat is further processed to extract coconut oil.
4. Sliced Coconut
Sliced coconut involves cutting coconut meat into thin slices, which are then dried. This product is primarily used in food preparation, including in canned coconut water production and beverages. It also serves as a valuable ingredient in processed foods, offering a natural flavor and texture.
5. Fresh Coconut Meat
Some Vietnamese producers also supply fresh coconut meat, which is dried or frozen to preserve it for long-term storage. Although less popular than shredded or sliced coconut, fresh dried coconut is consumed in markets like Japan, Korea, and Southeast Asia.
6. Whole Dried Coconut
Some Vietnamese businesses export whole dried coconuts that have been dehydrated and dried. These whole coconuts are often used in the beverage or food processing industries, serving as a natural, unprocessed product for various applications.
7. Coconut Flour
Coconut flour is made by grinding dried coconut meat into a fine powder. It is increasingly popular in the production of health-conscious food products, such as cakes, smoothies, and snacks. Coconut flour also finds use in the cosmetics industry, particularly in the formulation of skincare products like lotions, shampoos, and shower gels. Key markets for coconut flour include the US, Canada, Europe, and various Asian countries, where there is a growing demand for organic and health-focused products.
8. Coconut Meal
Coconut meal is a by-product of coconut oil production, rich in fiber. It is primarily used in animal feed production but also serves as an ingredient in functional foods, confectionery, and nutritional supplements. While not a primary export product, coconut meal has a stable market, contributing to the overall value of Vietnam’s coconut industry.
What is the export potential for Vietnam’s coconut industry?
The export potential for Vietnam’s coconut industry is exceptionally strong, driven by a global coconut products market that is on a significant upward trajectory. Valued at US$20.24 billion in 2022, the market is projected to reach US$30.4 billion by 2030, with an expected compound annual growth rate (CAGR) of 8.4% from 2023 onwards. This robust growth is fueled by increasing worldwide demand for coconut products, particularly due to the rise of sustainable living, green lifestyles, and the surge in veganism, especially in Europe and the US. Vietnam is well-positioned to capitalize on this demand, offering high-quality coconut products at competitive prices.
See more: Desiccated Coconut: Uses in Food Industry & Health Benefits
In particular, the coconut milk and cream market is expected to grow from US$21.64 billion in 2023 to US$31.31 billion by 2030, at a CAGR of 5.41%. This indicates strong and sustained growth in the sector, with coconut products playing a key role in plant-based diets.
Vietnam is positioning itself as a significant player in the global coconut market, thanks to its abundant coconut production and unique coconut varieties, such as the Siamese coconut with its sweeter taste and higher water content. Additionally, the dried coconuts from Vietnam have a high oil content of 60-65%, making them highly sought after. However, the Vietnamese coconut industry still faces challenges in fully capitalizing on its coconut output.
Looking ahead, from 2025 to 2030, Vietnam is projected to become a key supplier of coconut products globally, benefitting from its 17 global free trade agreements, the highest in Southeast Asia. This offers Vietnam a distinct advantage in exporting coconut products with 0% tax rates, making prices 10-15% cheaper than other regions while maintaining high product quality. This competitive pricing and superior quality provide international buyers with an attractive option for sourcing coconut products.
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