Why Coconut Oil Prices Are So High In 2025? (Image: X/ amerix)
Coconut oil, a staple in Indian households and an essential raw material for food, cosmetics, and wellness industries, has seen a sharp and sustained price surge in 2025.
Once priced between ₹250–₹300 per litre in retail, coconut oil now trades in the range of ₹435–₹450, marking one of the steepest increases in recent years.
This dramatic escalation has sent ripples across supply chains, affecting everyone from small-scale soapmakers to large FMCG brands, not to mention the average consumer.
But what’s behind this spike?
While Kerala remains one of India’s leading coconut producers, the state has historically relied on imports from Tamil Nadu to meet internal demand.
However, 2025 has witnessed a reversal of roles, as Tamil Nadu, traditionally a surplus region has reported widespread crop disease affecting coconut palms across key districts.
Farmers and agriculture officials in Tamil Nadu have flagged an outbreak of stem bleeding and root wilt diseases, exacerbated by erratic rainfall and poor soil health. As a result, coconut yield has dropped significantly, cutting the usual interstate supply to Kerala by nearly half.
Kerala’s own production has been under pressure due to older plantations and slow replanting cycles. This dual blow has created a bottleneck in fresh coconut availability, which directly impacts oil extraction units across southern India.
Compounding the crop-related woes are climate challenges across the region. In Karnataka, particularly Bengaluru and surrounding districts—an unusually harsh summer with prolonged heatwaves led to a surge in demand for tender coconuts, diverting a portion of the raw material away from oil extraction.
Farmers and vendors across southern markets report that tender coconuts are being sold for as high as ₹70 apiece, driven by urban demand and limited stock. With fewer coconuts reaching oil mills, extraction rates have declined, pushing up wholesale and retail oil prices.
The cost of producing coconut oil has also risen steeply due to inflationary pressures. From fertilizers and irrigation to labour and transport, nearly every component of the production chain has seen a cost hike in 2025. Packaging materials, particularly tin and PET containers, have also become more expensive, contributing to the final retail markup.
Transport logistics, especially for moving coconuts and oil from southern states to major northern and western markets, remain disrupted due to fuel price fluctuations and irregular supply chain networks.
Read also: IIT Bombay Study Finds Collagen May Aggravate Type 2 Diabetes
Internationally, coconut oil prices have been on an upswing, with major exporters like the Philippines and Indonesia facing typhoons and droughts that disrupted harvests.
Although India remains largely self-sufficient, global shortages and international pricing trends have an indirect influence on local markets, especially for bulk buyers and exporters.
lso, due to high market prices, adulteration has become widespread—especially in loose and unbranded coconut oil sold in local markets. unscrupulous sellers are mixing cheap palm oil or other low-grade edible oils with coconut oil to maximize profit margins.
With prices expected to remain high until at least October 2026, businesses are taking strategic steps. Some FMCG companies are considering reformulating products using blended or alternative oils to control costs. Others are entering long-term supply agreements with producers to lock in rates.
Government officials, meanwhile, are encouraging replanting schemes and exploring disease-resistant coconut varieties, but results may not materialize for another few years.
