Coconuts 101: The Comprehensive Guide for Investors

Discover where the best coconut farmland is, how coconut prices move in response to market pressure, and who the world’s biggest coconut consumers are.

Coconuts are among the best-known and most iconic exotic fruits. Nothing brings the idea of a tropical island paradise to mind quite the way coconuts do. Yet there is much more to this fruit as an agricultural commodity than meets the eye.

Coconuts Offer Unmatched Versatility and Resilience

Coconuts are among the most versatile tree crops in the world. They are a staple crop in many Polynesian and South Asian cultures, while the western world considers them an upscale exotic fruit and healthy oil source. Coconuts are used in sweet desserts, refreshing beverages, hearty curries, and much more.

At the same time, coconuts command high prices in the world of cosmetics and healthcare. Coconut oil-based moisturizers and healthcare supplements represent a vital market of their own.

But that’s not all – even the natural fiber of the coconut husk has industrial uses for eco-friendly manufacturers. All of these factors give coconuts robust demand and resilient pricing even in times of economic uncertainty.

Largest Coconut Consumers

Identifying which countries consume the most coconuts and coconut-based products can be tricky because of the myriad of ways one can utilize this fruit. For example, if we consider the consumption of coconuts in culinary settings, Sri Lanka leads the pack with 165 pounds per capita per year. 

Source: Faostat

If you look at coconut oil consumption, the situation changes dramatically. The Philippines is the world’s largest consumer of coconut oil, next to the European Union, India, and the United States. And while the Philippines and India produce their own coconuts, the EU and the USA have to import their coconut oil from abroad.

Source: US Department of Agriculture

What Types of Coconut Trees Are Best-Suited for Farming?

Now that we’ve seen where coconut is used, let’s talk about how and where they are grown. There are two main types of coconut trees: tall trees and dwarf trees.

• Tall trees grow to 50-90 feet in height and bear fruit 7-10 years after planting. They have a lifespan of up to 100 years and can cross-pollinate.
• Dwarf trees are 20-60 feet in height and bear fruit 4-5 years after planting. They live for an average of 40-50 years and self-pollinate.

The vast majority of commercial coconut operations opt for dwarf trees, as they bear fruit faster and require far less work to harvest. Some coconut varieties are unique to one tree, while others are hybrids:

• Pacific Tall Coconut Trees bear fruit within 6-7 years of planting. They are drought-tolerant and can produce green, yellow, orange, and brown fruits, depending on the ripening time.
• Caribbean Tall Coconut Trees bear fruit within 6-8 years. These trees can’t survive without well-drained, loamy soil.
• Maypan Coconut Trees are a hybrid of dwarf Malayan and Panama tall trees. These trees are hardy against disease and cold weather, and they bear medium to large-sized fruits.
• Tiptur Tall Coconut Trees have leathery fronds that reach maturity in 6-7 years and are among the most sought-after coconut varieties on the market.
• Orange Dwarf Coconut Trees produce fruit in 3-4 years This tree does not thrive in windy areas.
• Green Dwarf Coconut Trees begin bearing fruit within 3-4 years. They are disease-resistant and have a striking dark green color.
• Malayan Yellow Dwarf Coconut Trees are native to Indonesia and bear fruit after 3-4 years. They are often favored due to their resistance to fatal yellowing disease.
• Fiji Dwarf Coconuts Trees are grown for ornamental purposes. They have swollen trunks and long fronds with a unique leaf arrangement. These trees are useful for coconut fiber production.
• King Coconut Trees produce striking orange coconuts. These coconuts are rarely commercialized for export.
• VHC1 Hybrid Coconut Trees are another hybrid variant. These trees produce fruits after four years and a high quantity of nuts, making them highly profitable. 
• Macapuno Coconut Trees are dwarf trees that produce a particularly sweet and nutty coconut fruit ideal for beverages and desserts. 

Biggest Coconut Suppliers

The Philippines, India, and Indonesia are the world’s biggest coconut suppliers. Together, these three countries make up more than two-thirds of global coconut production. However, all of these countries underwent major political and agricultural changes in the 1970s, which means most of their coconut crops were planted during this time.

• Indonesia is the world’s leading coconut producer, with the vast majority of farms concentrated on the island of Sulawesi. This island’s economy is dominated by a small number of products primarily designated for export, making it a fragile system.
• The Philippines are the second-largest global coconut producer, with a wide range of medium-sized plantations located throughout the archipelago. Many of these plantations have not updated their infrastructures since the 1980s, making it difficult for farm owners to turn steady profits.
• India is the world’s third-largest coconut producer, with production centered on the states of Kerala, Karnataka, and Tamil Nadu. While India boasts a highly developed economy, it does not always adequately protect coconut farmers from labor shortages or droughts, which has led to rising debt in the national coconut industry.

These factors, combined with the aging trees most Polynesian and South Asian coconut plantations have, make a strong case for moving coconut production to new territories. Latin American countries like Colombia offer an excellent window of opportunity into a dynamic market.

Colombia: The Next Global Coconut Supplier

When looking ahead, this coconut supply crunch in the Polynesian and South Asian markets is expected to last for at least 5-10 years. During this time, coconut prices will likely rise while production shifts to countries like Colombia, which is currently investing in new farming infrastructure to take advantage of the upcoming coconut supply crisis. This means there is significant potential upside for individuals looking to own coconut farmland in Colombia today. 

One of the most important reasons Colombia is best-prepared to command a larger share of the global coconut market is that it is closer to both of the world’s largest coconut oil importers – the United States and the EU – than the Philippines, Indonesia, or India. It is particularly well-positioned to trade with the United States thanks to its dual coastlines straddling the Pacific and Atlantic Oceans. 

Additionally, the country’s farmland offers ideal agricultural conditions for cultivating fast-growing, disease-resistant Malayan Dwarf coconuts. The Monteria region, located near Colombia’s Caribbean coast, has a warm, moderately humid tropical climate perfectly suited for coconut production. 

Finally, this region in particular receives an excellent balance of rainfall and sunlight, allowing for year-round coconut production from fast-growing Malayan Dwarf trees. In fact, our own Pietrasanta farm already has trees that are  close to full production.

How To Add Coconut To Your Portfolio

With so much opportunity ahead, this is an excellent time to consider owning coconut farmland. While in the past individuals have needed to be experienced farmers with significant financial and time resources to own a coconut farm, Farmfolio makes it easy.

Fill out the form below to learn more about our newest coconut opportunity and how you can generate steady annual income and long-term wealth from land appreciation without any of the traditional work that comes with owning a farm.

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