KUALA LUMPUR, Feb 2 — The humble coconut is a staple in Malaysian lives, from its refreshing water and creamy milk, to its role as prayer offerings at Hindu temples.
However, Malaysia is now grappling with a coconut supply crunch just as the country is heading into a bumper season of festivals including Chinese New Year, Thaipusam, and Ramadan that will all take place within weeks of one another.
In December, the Federal Agricultural Marketing Authority (Fama) noted a drop of up to 50 per cent in local coconut supply in several major markets, including Klang Valley, due to unfavourable weather.
Fama, through its subsidiary Famaco, stepped up imports of old coconuts from Indonesia to 320 metric tons in December — compared to 180 metric tons previously — and starting February, they will be importing an estimated 500 metric tons into peninsula every month.
How did this supply crunch start?
Coconut farmers began selling more young coconuts after demand rose during the hot spell last May. — Picture by Farhan Najib
Climate change
Coconuts thrive best in tropical climates such as found in Malaysia, which enjoys year-round sunshine and regular rainfall.
However, yields suffer when the weather becomes too hot during what is called musim lawas, the seasonal dry spell that typically occurs once a year between March and July.
Farmer Muniswaran Samudram, 36, said coconut flowers drop prematurely due to prolonged hot and arid weather during such periods, reducing the overall yield by 10 to 15 per cent.
Climate change has also made it more difficult for coconut farmers to reliably predict when this dry spell may occur.
“Usually, there will be heavy rain in Perak in October, but last year we saw less rainfall that month,” Muniswaran, who owns and manages a 50-hectare coconut plantation in Bagan Datuk, said.
Coconut Masco managing director Teh Wen Kai said the prolonged dry spell last year also sparked higher demand for fresh coconuts, which had a corollary effect of reducing mature fruit output locally starting in November.
“Since then, the price of coconut has jumped by 15 to 20 per cent. And, Thailand is also competing with us for Indonesian coconuts now because of a shortfall there, too,” he said.
In October 2024, Thailand’s Agriculture and Cooperatives Ministry projected the country’s mature coconut yield to plummet to 0.86 million tonnes as coconut planters in the kingdom grappled with prolonged drought and a pest infestation.
Indonesia is the world’s leading coconut producer, with an annual output of 2.8 million tonnes, and is a major exporter to China, Malaysia, and Singapore. However, the ongoing export demand is also causing supply constraints in republic itself.
Even before the crisis, Indonesia’s coconut industry has been struggling with stagnant productivity. Around 378,000 hectares of coconut trees in Indonesia are past their prime and the country would require 38 years to fully replace them at the current pace, Indonesia Business Post reported in September 2024.
Given its limited supply, Indonesia has been diverting most of its coconut exports to Thailand, which is offering a higher price than Malaysia, the New Straits Times reported in December.
Muniswaran said Thailand may be doing so to honour its own export contracts to China, where the kingdom is the major supplier of tropical fruits.
A worker sorts dehusked coconuts at Kusuma Agroniaga Sdn Bhd in Semenyih on January 16, 2025. — Picture by Raymond Manuel
Wait, isn’t Malaysia also a tropical country?
While Malaysia also has the climate conducive to growing coconuts, they have not been an agricultural priority in the country where cash crops such as oil palm and rubber are more lucrative.
Opportunity cost is another reason that the local supply of mature fruits is low.
“Farmers only have to wait for about 21 to 23 days to sell young coconuts, but we will have to wait about 45 to 48 days for the coconuts to mature,” Muniswaran explained.
While he said the rainy season towards the end of last year had reduced demand for young coconuts, this would only help restore local supply of mature fruits in April, crucially just past the peak demand periods of the major festivals taking place from the end of January to March.
“Still, the government has to step up coconut imports to meet the high demand for santan during Ramadan and Hari Raya Aidilfitri,” he explained, using the Malay word for coconut milk.
Teh predicted that supply should recover in time for Hari Raya, but also offered a glimpse into the difference in scale between coconut cultivation in Malaysia and Indonesia.
He said local suppliers have long preferred purchasing from the republic as it was a more reliable source, both in terms of output and price.
“Local farmers fix the price of coconuts per fruit while Indonesian exporters sell to us based on tonnes because of their larger production capacity.”
