In the summer season, ice cream is one of the most bought sweet products, but it could cost more because of the high prices for coconut oil, a surprising ingredient in the dessert recipe, but very used.
Coconut oil could increase ice cream. Photo archive
The varieties are countless, from the simplest to the most sophisticated or innovative, from chocolate or vanilla flavors to Japanese ice cream, the most expensive in the world. Although the recipes are particularly diverse, for many of these products, there is a common set of basic ingredients that include milk, sugar, cocoa butter and coconut oil.
Coconut oil not only improves texture and brings a more delicate, tropical taste, but also has a higher melting point, thus contributing to the solid form of ice cream in summer.
Philippines, Indonesia and India are the largest world -raw material producers from which coconut oil is obtained. Of these, the first two states have over 70% of the global market together. In recent years, however, the unusually dry and hot weather in Southeast Asia has affected production.
As the production of coconuts lasts one year, the effects are fully felt in the current season. The production descended by over 6% in 2024-25, but after recent rains in the region, 2026 could bring more relaxed conditions. The increase of the exports of fresh coconuts from Indonesia to China by 146% in the first trimester reduced the availability of raw material.
What has led to price increase
The lack of coordination between farmers and processors, the strong demand from Asia and Europe and the weaker US dollar, which has increased export competitiveness, have also contributed to the ascension of prices, and some distributors have already signaled that they prefer to keep products in stock while waiting for market conditions and more profitable, stresses Claudiu Cazacu.
The price of coconut oil sent from the Philippines to Rotterdam port almost doubled in the last year, reaching $ 2,800/tonne. The prices had a similar trajectory in Sri Lanka, and in India, the prices have tripled over the last year, reaching over 400 rupees per kilogram.
The cost of cocoa beans encouraged chocolate and dessert producers to reduce their weight and to use more coconut oil. The process is more advantageous economic, even under the conditions of current prices higher for coconut oil, considering the multiplication of 3-4 times the cost for cocoa, compared to the landmarks 2-3 years ago.
The high demand from the food industry is completed by the upward trend of the cosmetic industry. Coconut oil has various uses, being present in lotions for hydration and skin care, hair, sun protection or for dermatological treatments. The product is, moreover, supported by the tendency to use natural ingredients.
At the same time, an increased interest from the influencers for the product that offers a more friendly alternative to palm oil brings a surplus of demand that has effects in an already relatively tense market, shows the XTB Romania strategy consultant.
Bio-fuels, another element that puts pressure on production
However, another reason further restricts the offer: the demand for biofuels. The Philippine government formulated a 4% target for mixture of diesel with coconut-meter-easter, derived from coconut oil, to reach 5% until the end of next year.
The estimated demand to generate 500 million liters of derivative product means 4.5 billion coconuts or almost a third of local production. Thus, the production will have to increase significantly to compensate for the redirection of the raw material to bio-combustibles. Otherwise, local environmental policies will lead to higher prices for ice cream lovers in Europe, Asia and the US.
For consumers, however, there are good news: the cheapness of other ingredients temper the prices. Sugar is, on the term scholarships in the US, on a decreased tendency in the last year, with a decline of over 12%, similar to that of milk in a similar period, points out the XTB Romania strategy consultant, investment company on international scholarships.
Cocoa beans, although much more expensive than a few years ago, have moved away from historical peaks. Together, these dynamics “sweeten” the cost of coconut oil. However, on several continents, ice cream could provide a more expensive sweet refresh this year.
