Coconut oil

Cracking the coconut industry



Is coconut oil an ethical substitute for palm oil? Anna Clayton asks Nora Pittenger of Fair Trade USA.



Where do most coconut products come from?


Top-producing countries for coconut include: Indonesia, Philippines, India, Brazil, Sri Lanka, and Thailand. The majority of Fair Trade Certified™ coconuts currently come from small-scale farmers (owning less than a few hectares of land) in the Philippines, where about 60% of farmers live in poverty.



What is coconut used for?


Over 25 different products can be made from a single coconut. Coconut oil is one of the most popular. Not only is the oil used for food and body care products, it’s also often converted to a surfactant, which is then used in household cleaners: laundry detergent, liquid soaps, bar soap, dish cleaning fluid, etc. Not many people are aware that some of their daily household products contain ingredients grown by deeply impoverished coconut farmers.



Are farmers benefiting from the growing coconut trade?


Many farmers around the world have been growing and harvesting coconut as their primary livelihood for generations. Despite being used in more and more products, coconut prices are still very low, and farmers don’t have the resources needed to invest in productivity or replace ageing trees, let alone pay for medical care and schooling for their children. In a nutshell, coconut farming is not a very viable profession, and the next generation is looking for the exit.



What are the key issues associated with the industry?


  • Extreme poverty: coconut farmers are among the poorest of the poor in countries like Indonesia and the Philippines; this threatens the sustainability of coconut farming as a livelihood.
  • Unfavourable and variable prices: given that small plots of land are farmed, coconut farmers and farm workers average about one dollar a day throughout the year.
  • Low yields and productivity: particularly as coconut trees age, their inefficiency makes the cost of maintaining and harvesting coconuts extremely high.
  • Mono-crop farming: coconut is mainly grown as a mono-crop; fostering an environment of low crop diversity that can be detrimental to the environment and risky for farmers.



Coconut oil versus palm oil: which is more sustainable?


The deforestation practices linked with palm oil production are not really associated with the coconut industry. With that said, both crops and farmer groups face environmental and social challenges. It’s critical for consumers to support both sustainable palm oil and sustainable coconut oil.



What should ethical consumers look out for when buying coconut products?


People should look for the Fair Trade Certified™ label on products containing coconut. When you see that logo you know that the coconuts were produced with care for people and planet, and that farmers earned additional money to invest in their farms, families and communities.

On top of the sale price, Fair Trade farmers earn an additional Community Development Premium, $40-$90 per Metric Ton. These funds are invested in much-needed projects like healthcare, education, agricultural training and business development. A group of farmers in the Philippines voted to use this money for a disaster relief fund after Typhoon Glenda, to rebuild their farms and communities. And if people have a favourite product that uses coconut, ask that brand to ‘Go Fair Trade.’

Stores listen to their customers. Every time someone asks a store manager for more Fair Trade, drops off an information card or speaks up on social media, it makes a difference!



What other certification standards currently exist?


Organic certification is the most prevalent. There are also a few other certifications working (or beginning to work) in the industry, for example from the Institute for Marketecology (IMO). Local governments are also investing more and more into the coconut sector. For example, The Philippine Coconut Authority ( is currently providing seedlings to farmers in the region, particularly Fair Trade farmers who vote to invest their premiums in productivity, good agricultural practices and farmer training programs. After the typhoon, we also saw many NGOs invest in coconut farmer support (e.g. Lutheran World Relief, ACDI/VOCA).

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