Coconut prices fall due to “technical bottlenecks”, not market crisis

Recently, the price of fresh coconuts in the Mekong Delta has been on a downward trend, causing anxiety for coconut growers and purchasing businesses. However, from the perspective of supply chain analysis, this is not a supply-demand crisis, nor is it a sign of a weakening market. The price drop is mainly due to some shipments being returned due to inconsistent quality, which is a technical bottleneck that can be quickly overcome.

Recently, the price of fresh coconuts in the Mekong Delta has been on a downward trend, causing anxiety among coconut growers and purchasing businesses. However, from the perspective of supply chain analysis, this is not a supply-demand crisis, nor is it a sign of market weakness.

The price drop is mainly due to some batches being returned due to inconsistent quality, which is a technical bottleneck that can be quickly fixed.

Coconut consumption demand in major markets such as China, South Korea, and the Middle East remains high; no country has announced restrictions on importing Vietnamese coconuts (Illustration photo: TRAN THANH SANG).

Prices fall but world supply and demand do not decrease

In fact, import markets still maintain stable demand, with no signs of a decrease in orders; the price drop is just a temporary response of the supply chain. Therefore, the most important thing at this time is to reassure the market, stabilize the psychology of farmers and businesses, avoid "dumping" or "cutting down and renovating gardens", and promptly handle technical bottlenecks to restore confidence.

The positive point is that the demand for coconut consumption in major markets such as China, South Korea, and the Middle East remains high; no country has announced restrictions on importing Vietnamese coconuts; market signals show that the demand for coconut consumption has not decreased.

Mr. Cu Van Thanh - CEO of Luong Quoi Coconut Processing Company Limited, Ben Tre said: The processing situation of coconut processing factories in Vinh Long province is still operating normally. The consumption of industrial coconut processed products such as: canned coconut water, coconut milk, coconut oil, dried coconut rice, especially organic coconut products are highly appreciated by customers and are fulfilling signed orders.

Therefore, the recent price drop does not come from world demand, but mainly from internal factors - especially the fact that some shipments were returned because the quality was mixed and did not meet the technical requirements of the importer.

This is a technical problem, not a market problem. And technical bottlenecks are much quicker to resolve than supply-demand crises.

The root cause of the returned shipments was not a systemic problem. Some exporters said the containers were returned because the coconuts in the same shipment were not of the same size; mixed varieties (green Siamese coconut - dwarf Siamese coconut - hybrid coconut); and some of the coconuts had not reached the standard maturity.

This incident immediately forced businesses to “react defensively”, temporarily reducing purchases to check quality. This created a psychological effect, causing prices to fall in some areas.

However, from an expert perspective, this is not a systemic error of the entire industry, but only occurs in a few businesses; there is no evidence that import markets have negative assessments of all Vietnamese coconuts; this incident can be completely resolved within 2-3 weeks if businesses tighten the classification process.

It is important to avoid letting the sentiment spread, because fear is what causes prices to fall further, not the market.

Market confidence remains and can recover quickly.

In agricultural exports, similar technical problems have occurred with mangoes, dragon fruit, jackfruit, etc., but after reviewing and classifying and meeting quality requirements, prices have recovered quickly. Coconuts are also subject to that rule; there are no market factors that create long-term pressure.

If quality standardization is handled well, prices can increase again in the next purchasing cycle or recover weekly when businesses re-import.

Recovery momentum, raw material areas have become accustomed to classification requirements; businesses are proactively tightening quality from the beginning; Chinese market demand has increased since the end of November due to the cold season switching to warm coconut water; large businesses still maintain stable orders.

In addition, coconut growers need to take action, not sell off, not destroy their gardens, not convert quickly. The price drop is only a short-term phenomenon, the demand for coconuts in the international market has not decreased, prices have a basis for recovery. People should not sell off in large quantities or sell off, this action will only cause prices to fall further.

It can be affirmed that Vietnamese coconuts have not lost their market, only some shipments have been returned due to technical errors; this is not a ban, nor a long-term trend. Farmers need to calmly wait for the market to stabilize, in the next few weeks, when businesses tighten the classification process, the market will return to normal .

We need to look at and evaluate objectively, this is an important opportunity for the coconut industry to upgrade, businesses are forced to classify more seriously. Farmers need to be trained on export standards; cooperatives need to further strengthen the role of "quality control stations". The provincial Department of Agriculture and Environment can re-plan varieties for export... And when the quality is more uniform, the price of Vietnamese coconut will increase steadily, with less fluctuations, instead of depending on the market as it is now.

Recommendations for the market to stabilize soon: For media agencies, reporting needs to be accurate and reflect the market comprehensively. The coconut industry is cyclical, dependent on international supply and demand. When supply increases, prices decrease; when supply decreases, prices recover. However, Vietnam's processed coconut products are still highly appreciated for their quality and reputation, but must compete strongly when participating deeply in the global coconut supply chain.

Vietnam's processed coconut products are still highly appreciated for their quality and reputation (Illustration: TRAN THANH SANG).

For businesses, it is necessary to unify the purchasing standards right from the garden, not mix varieties in the shipment and publicize the classification process so that people can understand, while increasing links with cooperatives.

For farmers, it is absolutely necessary not to sell in bulk when the price is low; pick at the right maturity, classify before delivery; participate in growing areas, growing area codes, and cooperative groups.

For management agencies, it is necessary to send out official messages to reassure the market; support businesses in quality checks; increase training in classification according to export standards...

The current decline in coconut prices is due to technical factors, not a crisis; the international market still maintains strong demand; confidence can be restored quickly if we handle it properly. This is an opportunity to re-standardize the quality and increase the value of Vietnamese coconuts. If businesses, cooperatives, and coconut farmers cooperate well, coconut prices will not fall further and can recover in the short term.

TRAN QUOC TUAN

Director of Department of Industry and Trade

Source: https://baovinhlong.com.vn/kinh-te/202511/gia-dua-giam-vi-diem-nghen-ky-thuat-khong-phai-khung-hoang-thi-truong-3b0405f/