The coconut market in 2026 has split in two. Coconut oil has fallen for four straight months and printed $1,853 per tonne in August 2026, 32% below its Q3 2025 average, according to the World Bank’s September 2026 Pink Sheet. Container freight went the other way. Drewry’s World Container Index rose from $2,553 per 40ft on 14 May to $4,465 on 3 September 2026, a 75% climb.
For a buyer, the question is how much of the price fall survives the voyage. On Asia–Europe lanes, most of it. Into the US East Coast, a third or more is gone before the container clears. Origin nut prices have also eased more slowly than oil, which keeps desiccated coconut and coconut milk firmer than the oil screen suggests.
Q4 adds a third variable. NOAA gives a 69% chance of a historic El Niño in October–December 2026. That is a 2027–28 supply risk, and the cheapest time to cover it is while the curve is soft.
What happened to coconut market prices in 2026?
They round-tripped a supply shock. Coconut oil (CNO) averaged $1,519/t in 2024, then $2,480/t in 2025 as harvests damaged by the 2023–24 El Niño reached the mills. The 2026 prints show supply coming back.
| Period | Coconut oil ($/t) | Palm kernel oil ($/t) | CNO minus PKO ($/t) |
|---|---|---|---|
| 2024 average | 1,519 | 1,412 | +107 |
| 2025 average | 2,480 | 2,093 | +387 |
| Q3 2025 | 2,727 | 2,258 | +469 |
| Q2 2026 | 2,161 | 2,396 | −235 |
| August 2026 | 1,853 | 2,264 | −411 |
Source: World Bank Pink Sheet, CFR NW Europe basis, released 2 September 2026. Spread column calculated from the same table.
The last column is the one to watch. Palm kernel oil (PKO) is coconut oil’s closest lauric substitute, meaning both are rich in lauric acid, and CNO normally trades above it. That premium flipped to a discount in Q1 2026 and has since widened to $411. Formulators who moved to PKO during the 2025 spike now have a price reason to move back, and that returning demand is one of the few things that could put a floor under coconut oil this quarter.
Background: how the copra cycle drives multi-year price waves.
Why are nut prices lagging the oil price?
Nut cost reflects local supply, and local supply moves on its own schedule. Sri Lanka’s Colombo auction, run by the Coconut Development Authority, cleared at LKR 117,581 per 1,000 nuts on 3 September 2026. The price has held in a LKR 112,000–118,000 band since late July while CNO fell every month.
That is 9.4% below the LKR 129,732 recorded on 25 September 2025. The rupee lost about 10% against the dollar over the same year, so dollar nut cost fell further than the local print shows. On desk arithmetic it is still only about 18% lower, against a 32% fall in oil.
Buyers are resisting at this level.
The share of offered nuts actually sold at Colombo fell from 96% on 30 July to 64% on 3 September. In the Philippines, the Philippine Coconut Authority put farmgate copra at PHP 44.52/kg and millgate at PHP 52.54/kg in July 2026, and is seeking powers to set a copra floor price. A legislated floor would slow any further fall.
The practical effect: kernel products such as desiccated coconut, coconut milk and coconut flour carry more of the nut price and less of the oil price. They will reprice down more slowly than coconut oil.
What happened to container freight in 2026?
The Strait of Hormuz closed on 28 February 2026, and freight has been repricing around it since. The Red Sea still matters, because Cape of Good Hope routing adds 10 to 15 days on Asia–Europe. But Hormuz is what moved rates, and the damage is uneven by lane, as Xeneta’s 3 September 2026 update shows.
| Lane (Xeneta, 3 Sep 2026) | $/40ft | Change since 28 Feb | Implied added $/40ft | Added $/t at 25 t |
|---|---|---|---|---|
| Far East–North Europe | 4,532 | +111% | ~2,380 | ~95 |
| Far East–Mediterranean | 5,073 | +61% | ~1,920 | ~77 |
| Far East–US West Coast | 7,496 | +289% | ~5,570 | ~223 |
| Far East–US East Coast | 10,910 | +305% | ~8,220 | ~329 |
The 25-tonne load is a planning figure for a full 40ft of bagged product, and the implied added cost is calculated from Xeneta’s percentages. These are China-origin indices. No published index covers Colombo, Manila or Jakarta specifically, so treat them as a directional guide. Container choice by lane: see the Asia–Europe and Asia–US freight guide.
Congestion is what keeps rates high. Linerlytica counted a record 4.31 million TEU stranded at ports on 25 August 2026, 12.6% of global fleet capacity, with Colombo and Singapore among the congested hubs. Global schedule reliability fell to 29.4% in August, per Xeneta.
How much of the price fall reaches landed cost?
Set the two moves side by side. CNO fell $874/t from the Q3 2025 average to August 2026. Freight into North Europe added roughly $95/t over a shorter window. Into the US East Coast it added about $329/t, more than a third of the oil fall.
Direction into Q4 splits by lane. Asia–Europe spot rates have eased since early August; Drewry had Shanghai–Rotterdam down 5% week-on-week on 3 September as blank sailings dropped from four to one. Transpacific rates were still rising. A European buyer can reasonably expect freight to soften. A US East Coast buyer should not budget for it.
Currency helps both. On BIS monthly averages, the Sri Lankan rupee, Indian rupee, Indonesian rupiah and Philippine peso each lost between 7.6% and 10.2% against the dollar in the 12 months to August 2026. Weaker origin currencies let exporters hold USD FOB offers lower than local costs would otherwise allow. EUR/USD barely moved over the same period.
What does El Niño mean for Q4 and 2027?
Very little for Q4 tonnage and a great deal for the 2027 coconut market. NOAA’s 13 August 2026 ENSO discussion put the system on El Niño Advisory, with a greater than 90% chance of a very strong event over the northern winter and a 69% chance of a historic event in October–December 2026. It also noted suppressed rainfall over Indonesia.
A coconut palm takes roughly a year from flowering to a harvestable nut. Drought now damages the flowers that would have become late-2027 nuts, while Q4 2026 availability was set last year. The 2023–24 El Niño fed the 2025 spike through exactly this lag.
That timing gap is the opportunity. Forward cover for 2027 is priced off today’s soft curve, before any shortage shows in the data.
Demand held through the spike: US desiccated coconut import volume rose 1.0% in 2025 while its value rose 49.7%, on UN Comtrade data. Q4 is also the heavy quarter, with Q4 2025 taking 27.6% of annual US arrivals. In 2027, Chinese New Year falls on 6 February and Ramadan is expected to begin around 8 February, subject to moon sighting. GCC Ramadan stock and pre-holiday Asian factory shutdowns will compete for the same November–December shipping slots.
What this means for buyers
- Procurement managers (CPG): Lock part of 2027 cover in Q4 while CNO sits under $1,900/t. Fix the first half and index the second, so a weaker-than-forecast El Niño does not leave you overpaid. The contract structures guide covers the mechanics.
- Importers into Europe: Freight should ease through Q4. Book Ramadan and pre-CNY stock by early November, before the two demand waves meet.
- Importers into the US East Coast: Budget freight at current levels; at about $329/t added, it can outweigh any further FOB softness.
- Desiccated coconut buyers: Do not benchmark desiccated coconut offers against the CNO screen. Kernel products will lag the oil price down.
- Traders: Watch the CNO/PKO spread and Colombo clearance rates. A narrowing discount signals substitution demand returning; a sold share back above 90% means buyers are chasing nuts again.
FAQ
Is the coconut market still short in 2026? No. Coconut oil averaged $1,853/t in August 2026 on World Bank data, 32% below its Q3 2025 average. Supply has recovered from the 2023–24 El Niño damage. Origin nut prices remain firmer than oil, so kernel products such as desiccated coconut have eased less.
Why is coconut oil cheaper than palm kernel oil in 2026? Coconut supply recovered faster than demand returned. Many formulators switched to palm kernel oil during the 2025 spike. By August 2026 coconut oil traded $411/t below palm kernel oil, reversing its usual premium.
Will coconut prices rise again in 2027? The risk is real. NOAA gives a 69% chance of a historic El Niño in October–December 2026. With roughly a year between flowering and harvest, drought damage shows up in 2027–28 supply, not in Q4 2026 tonnage.
How much has freight added to coconut landed cost in 2026? It depends on the lane. Since 28 February 2026, Far East–North Europe rates have added roughly $95 per tonne on a 25-tonne 40ft load. Far East–US East Coast has added about $329 per tonne.
Want 2027 cover priced off this curve, across more than one origin? Send the desk an RFQ.