The coconut industry has a long and rich history in the Pacific region that dates back centuries. Beyond a treasured symbol of the region, the coconut tree has long been a vital source of food, shelter and income for many Pacific Island communities. Historically, the coconut trade in the Pacific was centred on smallholder farmers and families who have relied on the tree for daily sustenance, as well as local community trade on a micro-level. While the first half of the 20th century saw the industry expand to focus on the corporatised sale of copra, the dried kernel of the coconut, recent years has seen a surge in global demand for a wide variety of coconut by-products.
According to a recent report published by Allied Market Research, the global coconut products market was valued at US$11.5 billion in 2018 and is projected to reach US$31.1 billion by 2026, with a compound annual growth rate (CAGR) of 13.6 per cent during the forecast period. This growth is credited to a shift towards the production of value-added products such as virgin coconut oil, coconut milk, coconut cream and coconut water, in part due to the global boom in the health and wellness sector.
As a result, the Blue Pacific is today presented with numerous opportunities to leverage this abundant crop – forging pathways towards sustainable and healthy rural livelihoods, driving employment, income generation and economic growth throughout the region. Leveraging the Pacific’s most prolific crop provides an opportunity for the region to reap the myriad economic benefits this can bring, in turn improving the livelihoods of Pacific people through employment opportunities, and access to new markets for small-scale farmers who rely on coconut as a source of income and food security.
The Pacific Island nations are already major producers of coconuts and established exporters in the global industry. A study for the Pacific Community (SPC) found that Pacific Island countries currently make up over 50 per cent of world copra exports – with Papua New Guinea being the largest of these. Other major coconut-producing countries in the Blue Pacific include Vanuatu, Solomon Islands and Samoa.
As the global demand for coconut value-added products continues to grow, the opportunities for businesses, farmers and exporters in the region also expands. The production of coconut flour, coconut sugar, coconut water, coconut cream and other such coconut derivatives present opportunities to diversify income streams for farmers and processors, as well as increase industry competitiveness in the global market. Coconut water, in particular, is projected to grow at the highest CAGR in coming years due to its rise in demand among the North American and European market, driven primarily by the growing adoption of healthier functional drinks and an upsurge in its use as an ingredient in the beverage industry. Coconut oil also has strong demand in the cosmetics, and food and beverage industry due to its strong flavour, mild aroma, and emollient properties. The demand for virgin coconut oil (VCO) is growing faster due to the rising use of healthier vegetable oils and the increasing application of VCO in food supplements and premium healthy snacks – both expected to favour the segment’s growth in the market.
While all this increasing demand provides significant opportunities, the industry is not without its challenges. One of the primary issues is the lack of processing and packaging facilities in many Pacific Island countries. The limited availability of these facilities makes it difficult for farmers and processors to meet the quality and safety standards required by export markets, thereby limiting the ability of the industry to access these markets. Another challenge is the lack of access to finance and market information, hindering smallholder farmers and processors from appropriately investing in the development of their businesses.
Despite these challenges, the opportunities for the coconut industry in the Blue Pacific are numerous and significant. To fully realise this potential however, it remains key for governments and the private sector to work together to address the challenges facing the industry – including investing in infrastructure and facilities to support the industry’s development, providing access to finance and market information for farmers and processors, and supporting research and development to improve production techniques while increasing yields.
As the region looks towards the future, one thing is clear - the potential of the coconut industry in the Pacific is immense, with its vast potential to serve as a beacon of hope for farmers, businesses, and communities, providing a pathway to sustainable livelihoods and economic growth in the Blue Pacific.
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