No Relief in Coconut Oil Prices Till 2026; Kerala Plans Subsidy for Onam

Kannur: Coconut oil prices, which have risen sharply since 2024, are expected to stay high through 2025 despite a small correction projected for the following year. According to the World Bank's latest commodity outlook, global coconut oil prices are expected to touch 1,800 dollar per tonne in 2025, compared to 1,519 dollar in 2024—marking a steep year-on-year rise of 281 dollar. Though a minor 2.8% dip is forecast for 2026, bringing the average price down to around 1,750 dollar per tonne, the rates will likely remain well above the previous years’ levels.
In India, this upward trend has resulted in a sharp price rise across retail and wholesale markets. Wholesale rates have surged over 84%, and retail prices have gone up by about 71%. In many parts of Kerala, a litre of coconut oil is now priced above Rs 440, causing a shift in consumption patterns, with many turning to more affordable oils like sunflower and palmolein.
A key factor behind the price spike is the sharp fall in copra and coconut production. South India has seen a 40% reduction in copra output, severely affecting oil extraction units. Kerala, Tamil Nadu, and the Philippines—three major coconut-growing regions—have all faced disruptions in yield, primarily due to changing weather conditions. The El Niño phenomenon led to intense drought and heat, while unseasonal rains and storms damaged trees and interfered with traditional drying methods. In some parts of Tamil Nadu, rainfall disrupted copra processing for the first time in 60 years.
Meanwhile, global demand for coconut oil has increased due to its expanding use in the food processing industry, cosmetics, and biofuels. Value-added coconut-based products are also gaining popularity in international markets, especially in the US and Europe, adding further pressure on supply.
Kerafed Prepares Onam Relief Amid Soaring Prices

To tackle the impact of rising prices ahead of the Onam festival, the Kerala government is considering subsidised distribution of coconut oil for families holding Below Poverty Line (BPL) ration cards. A proposal for this scheme is being prepared by Kerafed, the Kerala State Co-operative Marketing Federation, and will soon be submitted to the government. The aim is to ease the burden on low-income households and ensure availability of quality coconut oil during the festive season.
In preparation, Kerafed has started procuring raw coconuts from farmers in Cherupuzha at Rs 75 per kg—two rupee above the market rate—to ensure steady supply. Procurement centres are being set up in Malappuram, Kozhikode, Palakkad, and Thrissur, in partnership with ESAF and local cooperative societies. The collected coconuts will be processed into copra and then converted into high-quality coconut oil to meet Onam demand.
Officials have also warned about the possible entry of adulterated coconut oil into the market during the high-demand season. Steps are being taken to enhance monitoring and ensure quality control, especially in the public distribution network.