Jakarta. The coconut processing industry is facing a crisis due to a surge in coconut exports, which has led to a shortage of domestic raw materials. The lack of control over export policies has exacerbated the situation, affecting the production of coconut-based products, despite high demand.

Dippos Naloanro Simanjuntak, Chairman of the Coconut Products Industry Division at the Indonesian Coconut Processing Industry Association (HIPKI), explained that the export boom, combined with declining domestic harvests due to a recent drought, has caused coconut prices to soar.

"Indonesia is the only coconut-producing country in the world that still allows the export of whole coconuts without any policy," said Dippos in Jakarta on Wednesday.

Prices have increased by up to 100 percent, with local markets now seeing prices ranging from Rp 14,000 ($0.86) to Rp 15,000 per coconut, while farmers are selling coconuts for as much as Rp 6,000 each. As a result, coconut processing industries are only operating at 30 percent capacity, unable to produce at full potential due to the high cost of raw materials.

HIPKI reports that both legal and illegal coconut exports, particularly to China, Thailand, Vietnam, and Malaysia, have been unregulated, leading to an imbalance where foreign industries benefit from added value while domestic industries struggle.

Many local processing plants, including small and medium-sized enterprises (SMEs), have already shut down or faced significant losses. HIPKI warns that without government intervention, the situation will worsen in the coming months.

To address this, HIPKI is urging the government to implement measures such as limiting coconut exports, imposing export quotas, or providing subsidies to help industries survive. The association also calls for the implementation of the Coconut Downstream Industry Roadmap (2025-2045) launched by the National Development Agency (Bappenas) in September 2024 to ensure long-term sustainability for the coconut processing sector.