Buyers Clamor for Coconut Oil

Coconut oil has been making large moves in recent months, with US prices soaring near 150 cents a lb. in early April, about 127 percent higher than the most recent five-year average, according to data collected by Sosland Publishing Co., reports the Food Business News on April 29.  “Coconut oil has been incredibly strong over the last several months as production has tightened up for key exporters and demand has remained steady,” said Alex Norton, president at Beeson & Associates, Inc.

One of the leading factors driving demand has been the surge in cocoa bean prices. In December, the nearby US ICE cocoa futures contract catapulted to a record $12,931 per ton, up 177% from the same period the year prior. Since then, values have backed away from peak levels but continue to remain well supported on reports of crop shortages and cocoa-grind data indicating persistently resilient consumer demand for cocoa-based product, the report said.

To salvage profit margins and control input costs, many confectionery and chocolate food manufacturers started reformulating products with viable substitutions. Coconut oil, with its comparable melting properties and similar mouthfeel attributes, is an established alternative for many cocoa butter applications. While coconut oil prices have risen sharply in recent months, it remains a discount compared to cocoa butter prices. And with chocolate products typically containing about 30% cocoa butter, the cost savings is significant, the report added.