Detailed study on virgin coconut oil

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STUDY ON PRODUCTION AND EXPORT OF VIRGIN COCONUT
OIL IN THE WORLD AND IN INDIA
BY
ANUJ VERMA (P35116)
Management Traineeship Segment
PRM 35
Submitted to
COCONUT DEVELOPMENT BOARD
Faculty Guide: Prof. ANAND VENKATESH
11-01-2016

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ACKNOWLEDGEMENT
There are some events in our lives which happen as a result of culmination of the efforts,
guidance and assistance of several people. This acknowledgement is an expression of
gratitude to all those people who came forward whenever they were needed at the opportune
time to make our lives richer by their help and inputs.
I am extremely grateful to Coconut Development Board and IRMA for giving me the
opportunity to work on study on production and export of virgin coconut oil in the world and
in India.
I would like to thank my reporting officer Mr. R. Janandevan for his continuous support and
guidance and Mr. Sabastian for his unconditional support.
We sincerely thank all our respondents who helped me. This study would not have been
possible without their support and patience, as well as their overtness in discussing issues and
in answering our questions
I take this opportunity to thank Professor Anand Venkatesh for providing guidance and help
during the course of the project. I would like to express my gratitude to the MTS committee
of IRMA for endowing me with this opportunity to learn.
Anuj Verma
(P35116)

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Executive Summary
I. Title: Study on production and export of virgin coconut oil in the world and in India
II. Organization: Coconut Development Board, Kochi
III. Reporting officer:Mr. R. Janandevan
IV. Faculty guide: Prof. AnandVenkatesh
V. Participant’s name: Anuj Verma (P35116)
India, Indonesia and other tropical countries have been consumers of coconut from thousands
of years. Every part of coconut is consumable either by human or animal so coconut tree is
referred to as Tree of life. The newest high value coconut product, which is becoming by
word in coconut producing countries, is virgin coconut oil. Recent studies on VCO revealed
its miraculous beneficial effect on health. It contains monolaurin, which can be used to treat
dental problems, hepatitis C as well as AIDS/HIV. Many literatures are published on benefit
of VCO. These factors are responsible for increasing of demand of VCO in world. The major
objectives of the study were to find the drawbacks and lags in Indian VCO industry and
reasons behind its poor performance, identification of potential markets, market analysis of
VCO worldwide and comparative analysis of major VCO exporting nations.
Historical import-export data and tariff rates of major coconut oil trading nations were
analyzed. Comparative analysis among major producers of coconut oil is done to identify the
strengths and weaknesses of Indian VCO industry. Database of e-resource market research
has been analysed. Major data regarding export, import, prices and various other indicators
were collected from Coconut Development Board, Asia Pacific Coconut Community and
International Trade Center. Qualitative information was collected from merchant exporters &
manufacturers in Kerala.
Major findings included huge potential market of VCO in the world due to its health benefit
and multifarious industry usage. Demand for VCO increased in recent years and showing
similar trends in coming years. Despite being one of the major producers of coconut in the
world, India produced very meagre quantity of VCO due to unawareness about benefit of
VCO in consumer, low domestic demand and high priced product. Export quantity of VCO
from India was low compare to major competitors such as Philippines, Sri Lanka due to
following reasons: lack of certified products, high priced products, lower production and
quality issues. To make Indian VCO globally competitive, following things are needed to be
done for quality improvement, cost reduction and awareness generation. American and
European markets have high demand for organic products for which India has very few
producers. Exporters lack nexus with the potential buyers from international market traders
are not able to export VCO.
Major recommendations are to improve exports government needs to focus upon production
and awareness generation in potential markets. Further organic cultivation of coconut needs
to be promoted as they have higher demand and higher premium price. Food safety
certifications such as HACCP, Kosher, USDA organic, and EU organic should be promoted
among producers and manufacturers. Exemptions and preferential treatments to exporters in
taxes and duties can be another measure to improve exports. From the increasing production
point of view, more concentration should be focused on hot pressing extraction of VCO and
when concern is more for quality and revenue consideration, then it should be focused on
Cold pressing extraction.

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Contents
ACKNOWLEDGEMENT..........................................................................................................i
LIST OF TABLES.....................................................................................................................v
LIST OF FIGURES ..................................................................................................................vi
1. INTRODUCTION..............................................................................................................1
2. OBJECTIVE.......................................................................................................................2
3. RESEARCH METHODOLOGY .......................................................................................2
3.1 Primary sources................................................................................................................2
3.2 Secondary sources............................................................................................................2
4. VIRGIN COCONUT OIL ..................................................................................................3
4.1 Production technology......................................................................................................3
4.1.1 Production process from fresh coconut meat ............................................................3
4.2 APCC prescribed standards of VCO................................................................................8
4.3 Health benefits from VCO ........................................................................................10
5. DATA ANALYSIS..............................................................................................................10
5.1 Market Analysis .............................................................................................................10
5.1.1 VCO E- Resource database .....................................................................................11
5.2 MAJOR EXPORTERS ..................................................................................................27
5.2.1 Philippines ...............................................................................................................27
5.2.2 Sri Lanka..................................................................................................................31
5.2.3 India.........................................................................................................................35
6. INDIAN VCO INDUSTRY SCENARIO............................................................................40
6.1 Inefficiencies in Indian VCO industry ...........................................................................40
6.1.1 Low domestic demand:............................................................................................41
6.1.2 Lack of potential buyer contact: ..............................................................................41
6.1.3 Lack of certified VCO:............................................................................................42
6.1.4 Spoilage:..................................................................................................................43
6.1.5 Additional export benefit:........................................................................................43
6.2 Misconception in virgin coconut oil processing and labelling:......................................43
6.2.1 Process Temperature................................................................................................43
6.2.2 Testa or brown skin of coconut kernel: ...................................................................43
6.2.3 Extra virgin and cold pressed label for VCO ..........................................................44
6.3 Tariff Rates.....................................................................................................................44
6.4 Currency exchange rate..................................................................................................45

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6.4 Business environment analysis.......................................................................................45
7. FINDINGS AND DISCUSSIONS ......................................................................................46
7.1 Findings from e- resource database and Export data .....................................................46
7.2 Findings from qualitative research.................................................................................47
7.3 Other Factors..................................................................................................................47
8. RECOMMENDATIONS.....................................................................................................48
9. REFERENCES ....................................................................................................................48
10. ANNEXURES .....................................................................................................................a
10.1 Annexure 1.....................................................................................................................a
10.2 Annexure 2.....................................................................................................................c

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LIST OF TABLES
Table 1: Comparative analysis of various VCO production technologies
Table 2: Prescribed standards for VCO by APCC
Table 3: Prescribed standard quantity of ions
Table 4: Prescribed standard quantity of various fatty acids
Table 5: Major producers of coconut in world and their milk production over the years
Table 6: Area under coconut production in major coconut producing countries
Table 7: Major foreign markets for Philippines coconut oil
Table 8: VCO export data from Philippines
Table 9: Major foreign markets for Philippines VCO
Table 10: Various programs/activities initiated to increase production and export
Table 11: Major foreign markets for Sri Lankan coconut oil
Table 12: Export quantity of VCO from Sri Lanka
Table 13: Major foreign markets for Sri Lankan VCO
Table 14: Export price of VCO over the years
Table 16: Major foreign markets for Indian coconut oil
Table 17: Exported quantity and price of VCO from India
Table 19: Tariff rates in focus market for Indian, Sri Lankan and Philippines products.
Table 20: Doing business rank in various parameters
Table 21: Process of starting a new business

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LIST OF FIGURES
Figure 1: Launch of new products where VCO have been used
Figure 2: Major categories flourished by VCO
Figure 3: Trend analysis of skincare‟s new product launch
Figure 4: Trend analysis of sauces & seasoning‟s new product launch
Figure 5: Trend analysis of soap and bath‟s new product launch
Figure 6: Trend analysis of soap and bath‟s new product launch
Figure 7: Major foreign markets where VCO products are presents
Figure 9: Major foreign markets where VCO used as product
Figure 10: Major claims made by company
Figure 11: Major categories where VCO are used in USA.
Figure 12: Launch of new products where VCO have been used in USA
Figure 13: Trend analysis of new VCO products in USA
Figure 14: Major claims made by VCO manufacturers
Figure 15: Major categories where VCO are used in Germany
Figure 17: Trend analysis of new VCO products present in Germany
Figure 18: Major claims made by VCO manufacturers of Germany
Figure 19: Major categories where VCO are used in Canada
Figure 20: Launch of new products where VCO have been used in Canada
Figure 21: Trend analysis of new VCO products present in Canada
Figure 22: Major claims made by VCO manufacturers of Canada

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Figure 23: Major categories where VCO are used in UK
Figure 25: Trend analysis of new VCO products present in UK
Figure 26: Major claims made by VCO manufacturers of UK
Figure 27: Trend analysis of new VCO products present in South Africa
Figure 28: Major claims made by VCO manufacturers of South Africa
Figure 29: Trend analysis of coconut oil
Figure 30: Trend analysis of VCO
Figure 35: Indian VCO export price movements
Figure 36: Major foreign markets for Indian VCO (quantity wise)
Figure 37: Major foreign markets for Indian VCO (value wise)
Figure 38: Historical data of exchange rate of major exporter of VCO

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1. INTRODUCTION
Coconut tree has been important source of nutrient and livelihood in tropical countries such
as Indonesia, Philippines, India etc for centuries. Research showed that in USA, Coconut oil
was important source of dietary fat apart from animal fat and dairy prior to advent of
American oil in 1940. Various research and studies have been done to characterise and
define various part of coconut tree. Every part of coconut tree including nuts can be
consumed by either human or animal or converted into valuable products. Coconut is most
valuable palm if used properly. This is why coconut referred as Tree of Life, Man‟s Most
Useful Tree, King of Tropical Flora, Tree of Abundance.
Desiccated coconut, Coconut milk/cream in liquid or powder and Coconut oil/copra oil are
widely known products from coconut meat. Coconut meat contains many essential nutrients.
Coconut water is another important product from coconut. It contains many micronutrients
and essential elements for body. Newest value added product which is gaining popularity in
consumers is “Virgin Coconut Oil”. It is composed of medium chain fatty acid, which is a
type of saturated fat. This MCFA is similar to fat found in mother milk and contain similar
nutriceutical effects. However,saturated fats have bad image in health industry. They are
harmful for health. It was the main argument of American‟s oil lobbyist group against VCO.
It was the main reason dwindle demand of coconut oil in western world. However, recent
studies shown opposite of aforementioned effect. Many researches are going on its beneficial
effect and some are already published. VCO contains monolaurin which has antiviral
properties and can be used to cure Hepatitis C, Dental problems, HIV/AIDS and Cancer.In
recent years there is sudden increase in demand of VCO in world. In USA, it is known as OZ
phenomena. Dr. OZ is the first person in USA, who talked about the health benefit of
consuming VCO daily on a T.V show. The factors behind the upsurge of VCO demand are
publications of books such as: “The Coconut Oil Miracles” and doctor prescription to
consume VCO.
There is huge demand of VCO in developed and economies such as: USA, Europe continent,
Japan, Republic of Korea.To serve this demand many continental countries started producing
VCO in large scale such as Philippines, Sri Lanka, Thailand etc. India is leading producer of
coconut in world 22 billion nuts per annum. The crop is distributed in 18 states and three
union territories under different agro climatic condition. India despite being the leading
producer of coconut in the world is unable to produce VCO in large scale and compete with

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other nations. There are many factors behind the incompetency of India such as quality
issues, high priced product, high production cost, lesser support from GOI, low domestic
demand of VCO, information asymmetry in manufacturer and exporter, lack of organic
certified farms, lack of certified products etc.
Coconut development board also export promotion council for coconut products is an apex
body. It works as a facilitator and promoter of Indian coconut products in the world and
domestic markets. In recent years various activities are undertaken by CDB to promote
various value added products of coconut such as: Neera, Desiccated coconut powder etc.
Now organisation wanted to promote Indian VCO to international markets because of
lucrative prices and potential of VCO in export market. This study was conducted to
understand the world scenario of VCO, major potential export locations, problems in Indian
VCO market at various levels and comparative analysis of major competitor.
2. OBJECTIVE
Broadly the study attempted; to do market analysis of VCO worldwide, identify the potential
markets, to find the drawbacks and lags in Indian VCO industry and reasons behind its poor
performance and comparative analysis of major VCO exporting nations.
3. RESEARCH METHODOLOGY
3.1 Primary sources
 Frequent interactions and personal interviews with the concerned employees and
officials of Coconut Development Board.
 Personal interview and surveys have been done with numerous merchant exporters
and manufacturer of VCO to understand problems in Indian VCO industry.
3.2 Secondary sources
 Complete institutional support in providing the research journals and published
articles regarding the super critical fluid extraction technology and extracted products
 The world‟s leading market intelligence agency of Global New Product Division
 Global and Indian trade websites like Trademap, Zauba. Association such as Asia
Pacific Coconut Community countries coconut board such as coconut development

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authority (Shri Lanka), Philippines coconut authority, UCAP sites were accessed to
get VCO export data.
 Access to various research journals, UNDP reports, newspaper articles, APCC
journal. Coconut development board journal were accessed to collect data and
information on VCO.
4. VIRGIN COCONUT OIL
4.1 Production technology
Virgin coconut oil can be produced either from fresh comminuted coconut meat or from
coconut milk or from coconut milk residue. There are eight technologies are present to
produce VCO from coconut. The choice of choosing technology depends on the scale and
available capital.
4.1.1 Production process from fresh coconut meat
4.1.1.1 Fresh dry process
Fresh dry is a general term of those technologies in which VCO obtained directly from the
fresh kernel of coconut. All these technologies require the dried coconut through grated,
shredded, ground and milled before extraction of VCO.
4.1.1.1.1 Fresh dry process, Wet milling route: Production process start with de-shelling
(removal of brown shell) either manually or using machine afterward splitting and slicing of
meat then washing, grinding, drying the particular meat and finally extract the oil using
specially designed screw type press. Coconut flakes were produced as by-product can be
converted into defatted desiccated coconut.
4.1.1.1.2 Fresh dry process Desiccated coconut route: Processing of fresh coconut before
extraction of VCO goes through following processes. Shelling of coconut then pairing in
which testa is removed either manually or using machine. Cutting of nuts depend on the
method used for pairing if pairing done manually the cutting is done after pairing otherwise
first cutting then pairing. Afterwards, washing of kernel done through water, grinding
through machine and drying on conveyor type belt, except sulphite treatment and then oil is
extracted using screw type press. Flakes were produced and can be converted into defatted
desiccated coconut. This process is useful when a good quality of desiccated coconut cannot
be produced.

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4.1.1.1.3 Fresh dry process, Grated coconut route: Process start with splitting the nut,
grating, blanching and drying the meat. Afterwards VCO extracted using screw type press
and flakes were by-product, which could be converted into desiccated coconut.
4.1.1.1.4 Low pressure oil extraction: It involves splitting of the the nuts and then grinding
it to fine particles and finally drying it to moisture content reached of 10-12% level and then
oil extraction using manually operated bridge press.
4.1.1.2 Wet process from coconut milk
Coconut milk is an emulsion of oil in water bounded by protein. Breaking of the protein bond
to obtain oil is the main concept behind fresh wet technologies. These protein bonds can be
broken down either by heat, centrifuge or natural enzyme. This technology is termed as fresh-
wet due to VCO recovery from coconut milk. The quality of coconut milk depends on the
method to be used for obtaining milk, maturity of nut, particle size of the kernel, kernel
temperature prior to extraction, ratio of water to comminute kernel (if water is added) and the
extraction pressure. A solid residue remains at the end after the extraction of milk from the
nut. This solid residue can be further utilized depending on the used process.
4.1.1.2.1 Traditional wet process: This technology is also known as modified kitchen
method. It is very similar to process of coconut oil production at home. The process involves
gradual heating of the coconut milk until the water gets evaporated and VCO and latex
remains at the end. Other variant of this process allows milk to sediment for 3 hours and then
removing the water from the mixture. Afterwards, gradual heating of the mixture would be
done to obtain VCO and latex.
4.1.1.2.2 Modified natural fermentation process: Research showed that if coconut milk is
kept for 36 to 48 hours, then the protein bonds breakdown itself and oil get separated from
the water. This is a natural ferment process however keeping milk for such long time
produces yellow oil which deteriorates the quality of VCO. So, to obtain good quality of oil
milk, it is kept for fermentation for 16 to 24 hours. Then fermented milk is decanted and oil is
separated out from the milk and still fermented solid contain some amount of oil, which is
recovered through gentle heating of material.
Coconut milk extraction start with splitting and grating of nut afterwards milk is extracted
either by manually, hydraulic jack method or motorised screw type milk press. Second milk
extraction can be done if milk was extracted manually. Add hot water to milk residue obtain

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after first extraction in 2:1. Mix thoroughly Place the mixture in a cheesecloth bag and
squeeze tightly. Add this milk extraction to the first and stir for about ten minutes. Afterward
dilute the coconut milk in 1:1 and keep the milk for 16 to 18 hours to ferment. Separate the
fermented curd (top layer of mixture) and scoop the oil. Filter the scooped VCO.
Second grade VCO is obtain from the fermented curd by keeping it for another 24 hours.
Every 80 husked coconut 6.5 litre of premium VCO and 1 litre of second grade VCO
obtained.
4.1.1.2.3 Centrifuge Process: There are different versions of centrifuge process. Process
steps depend on the type of centrifuge been used two phase or three phase.
4.1.1.2.3.1 Two phase centrifuge process: There are different variation of the two phase
process depend on the how VCO is recovered from the cream after the separation of milk
using centrifuge. Process 1: Water from the cream is evaporated using vacuum and protein is
recovered. Oil then passed through pressure filter to get clarified VCO and then vacuum
dried.
Process 2: Cream is first frozen then heated to double boiler and filtered to get coagulated
protein. Afterwards centrifugation of oil to remove the water and then vacuum dried.
Process 3: Cream is heated to coagulate the protein and evaporate the water. Afterwards
mixture is passed through pressure filter and then oil through vacuum filter.
Preparation of coconut milk is similar to fresh-dry high pressure expeller method, DCN route.
Coconut milk is extracted through motorised screw type coconut milk press. Filtration of
milk is done through stainless steel strainers. Then coconut milk is passed through liquid -
liquid centrifuge to get coconut cream. Afterwards cream is heated to coagulate the protein,
then filtration of oil through pressure filter and oil drying under vacuum. This process gives
lowest output of VCO in all the available technique.
4.1.1.2.3.2 Three phase centrifuge process: This method is much simpler than two phase
centrifuge process. Filtered coconut milk passed through three phase centrifuge, where oil is
separated from other component at 10000rpm centrifugal force. The milk is fed to centrifuge
with hot water. After the first centrifuge cloudy oil come outside. This oil again fed to
centrifuge with hot water for second pass. Then oil passed through micro filter to remove the

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fine particles. Preparation of milk is similar to two phase centrifuge process. Smallest three
phase centrifuge have processing capacity of 800 litres per hour.
4.1.1.2.4 Bawlan-Masa process: This is a hybrid of fresh dry and fresh wet process of VCO
production. Starting material for this process is coconut milk residue form in fresh milk
process. This process involves the blanching of residue then drying till specific moisture
content and subsequently defatting the residue under controlled environment using specific
instrument to get VCO and defatted flakes.
VCO produced through this technique is very light in texture, easily absorbed by skin and has
mild coconut smell. These factors are responsible for preference of this type of VCO by
manufacturer of aromatherapy oils and operators of soaps.
Types of
Process
Quality of Oil Advantage and Limitation
Fresh- dry
process, Wet
milling route
FFA- 0.05-0.08%
M.C.- 0.07-0.1%
Colour – water clear
Oil recovery – 31kg
per 100kg of fresh
milled coconut meat
Produces full protein medium fat coconut floor as
a co-product.
Long shelf life of oil: 1 year or more
Uses mechanical type of equipment to produce
oil.
Can be produced in a village-scale plant
operation.
Fresh- dry
process,
Desiccated
coconut route
FFA- 0.05-0.08%
M.C.- 0.07-0.1%
Colour- water clear
Oil recovery- 30kg per
100kg of fresh pared
ground meat
Produces full protein medium fat coconut floor
without testaas a co-product.
oil.
High investment cost, suited only to medium
scale operation (10000nuts/day or above).
Fresh- dry
process
FFA- 0.05-0.08%
M.C.- 0.07-0.1%
Colour- water white
Oil recovery- 25kgs
per 100kgs of grated
coconut meat
Produces full protein medium fat coconut floor
without testaas a co-product.
oil.
Can be done in micro-scale plant operation.

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Low pressure
method
FFA- 0.1-0.2%
M.C.- 0.17%
Colour- water clear
Oil recovery- 25kgs
coconut meat
Use manually operated equipment to produce the
oil.
Produces a semi-dry coconut residue that has to
be further dried or processed to have market
value.
Shelf life of oil is very short if not immediately
dried by gentle heating after extraction and
removing of water.
Traditional wet
or modified
kitchen process
FFA- 0.06-0.2%
M.C.- 0.07-0.14%
Colour- water clear to
pale yellow depending
on the heating process
Oil recovery- 16.5kgs
coconut meat
Very low investment cost.
Can be produced in a home scale operation using
ordinary kitchen utensil.
Produces a wet coconut residue that must be
further dried or processed to have market value.
Produces a by-product with no commercial value
at present.
After 5 days oil becomes rancid if it is not
properly heated to dryness after extraction to
remove water.
Class B oil can be recovered after class A oil is
skimmed off. This will give 19kg of total oil
recovery.
Modified
natural
fermentation
process
FFA- 0.1%
M.C.- 0.12%
Colour- water clear
Oil recovery- 19.8kgs
per 100kgs of fresh
grated coconut meat.
Can be produced in a home scale operation using
ordinary kitchen utensil or in micro scale
operation using semi-mechanised equipment.
Disposal of fermented skim milk can be a
problem if carried out capacity above 2000
nut/day. Skim must be diluted with water before
disposal of waste.
Oil produced could turn into sour if fermentation
period is prolonged. Oil must be properly heated
to dryness after extraction to remove water and
prevent rancidity development.

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recovery.
Centrifuge
process
FFA- 0.04-0.08%
M.C.- 0.1%
Colour- water clear
Oil recovery- 17kgs
coconut meat
Produces best quality of oil with sweet coconut
aroma if done in two stage centrifuge process.
Can only be produced medium and large
processing centres.
Further processing of skim milk into health
beverages, and meat residue into coconut flour
can improve profitability.
recovery.
Bawalan-Masa
process
FFA- 0.05-0.08%
M.C.- 0.07-0.12%
Colour- water clear
Oil recovery- 170kgs
per 1000kgs of wet
residue
Further recovery of high value oil from residue
makes coconut milk processing more profitable.
Long shelf life: 1 year or more.
Produces low fat, high fibre coconut floor as a
co-product.
Require mechanical type of equipment to produce
the oil.
Production process has to attached or integrated
into existing coconut milk processing plant.
Table 1: Comparative analysis of various VCO production technologies
4.2 APCC prescribed standards of VCO
Asia pacific coconut community has prescribed standards for virgin coconut oil. It has
prescribed maximum limits of contents, micronutrients and fatty acid. These standards were
created to standardize virgin coconut oil in APCC member countries.
Hygiene of products should be maintained in accordance to general principles of Food
hygiene recommended by codex (CAC/RCP 1-1969, Rev. 4-2003). Product shall be labelled
as virgin coconut oil and follow general standard for pre-packaged food (Codex Stan 1-1985,
Rev.6 – 2008).

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Parameter
Moisture (%) Max 0.1
Matters Volatile at 1200 C (%) Max 0.2
Free Fatty Acid (%) Max 0.2
Peroxide Value meq/kg Max 3
Relative density 0.915 – 0.920
Refractive index at 400 C 1.4480 – 1.4492
Insoluble impurities per cent by mass Max 0.05
Saponification Value 250 – 260 min
Iodine Value 4.1 -11
Unsaponifiable matter % by mass max 0.2 - 0.5
Specific gravity at 30 deg./30 deg. C 0.915 – 0.920
Polenske Value min 13
Total Plate Count < 0.5
Colour Water clean
Odour and Taste
Natural fresh coconut scent free of
sediment, free form rancid odour
Table 2: Prescribed standards for VCO by APCC
Parameter Mg/kg
Iron (Fe) Max 5
Copper (Cu) Max 0.4
Lead (Pb) Max 0.1
Arsenic (As) Max 0.1
Table 3: Prescribed standard quantity of ions
Common name Composition (%)
Caproic acid C 6:0 0.10 – 0.95
Caprylic acid C 8:0 4 – 10
Capric acid C 10:0 4 – 8
Lauric acid C 12:0 45 – 56
Myristic acid C 14:0 16 – 21
Palmitic acid C 16:0 7.5 – 10.2
Stearic acid C 18:0 2 – 4
Oleic acid C 18:1 4.5 – 10
Linoleic acid C 18:2 0.7 – 2.5
Table 4: Prescribed standard quantity of various fatty acids

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4.3 Health benefits from VCO
Coconut has 64% of medium chain fatty acid and has 45% of lauric acid content. It has anti-
inflammatory and immune-regulatory actions to control diabetes, hypertension, cancer, heart
disease and auto immune diseases. It helps to avoid obesity and protection against bacterial,
viral infection. It is good for skin, help to treat acne, antiseptic properties and antioxidant
effects.
5. DATA ANALYSIS
5.1 Market Analysis
2005 2006 2007 2008 2009 2010 2011 2012 2013
Indonesia 15484 15656 15966 16235 16498 16332.2 15249 16256 16463
India 14811 15840.4 14743.6 15729.8 15729.8 15730 16942.9
2
23351.2 22680
Philippines 14056 12960 12327 12573 15668 15510 15245 15862 15353
Brazil 3898.67 3722.77 3538.76 3764.22 3288.97 3445.11 3450 3457 3326.57
Sri Lanka 2215 2785 2869 2909 2853 2619 2707 2741 2513
Papua New
Guinea
812.5 812.5 979 1101 1495 1495 1101 1495 1482.59
Mexico 1458.5 1446.5 1401.6 1414.52 1385 1397.2 1463.74
Thailand 1204 1248 1219 1186 1104 997.7 845 806 838
Vietnam 677.4 681 723.5 760.08 813.1 818.2 940.38 1015.14 1235.45
Malaysia 394 421 400 390 379 458.45 577 570 647
Sum of Production (Million nuts)
Table 5: Major producers of coconut in world and their milk production over the years
India ranked one in coconut production in world followed by Indonesia and Philippines in the
world. In 2013, these three nations produced 72% of total production of coconut in the world.
Coconut production in India has increased over the years. It has increased by 53% compare to
level of 2005 with annual growth rate of 6.66%. Coconut production from Philippines and
Indonesia slightly increased. Other than these three countries experienced little increase in
production.

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2005 2006 2007 2008 2009 2010 2011 2012 2013
Indonesia 3804 3789 3788 3799 3854 3808 3808 3796 3787
Philippines 3243 3311 3355 3380 3402 3400 3562 3574 3550
India 1946.8 1936.8 1903.2 1894.6 1894.57 1895 1896 2039 2137
Sri Lanka 395 395 395 395 395 395 395 395 395
Brazil 281 280 273 273 273 273 273 279 279
Thailand 344 226 225 247 239 231 216 214 209
Papua New Guinea 260 260 260 221 221 221 221 221 221
Mexico 150 179 179 179 176 176
Vietnam 132 133 133 141 143 147 155 157 158
Malaysia 121 115 120 115 100 110 109 112 98.5
Sum of Area (000 Ha)
Table 6: Area under coconut production in major coconut producing countries
Indonesia has largest area under cultivation of coconut in the world followed by Philippines
and India. These three countries cover 76% of total world area under coconut cultivation.
These three countries are major producer and having potential to produce various value added
products.
VCO can be consumed directly or as ingredient to manufacture a product. It is used as
ingredient in various industries such as: cosmetics, health care, food & beverages and sauces
and seasoning.
5.1.1 VCO E- Resource database
For this study 1075 products were studied where VCO used either used as raw material to
manufacture a product or main product to sell.
0
50
100
150
200
250
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

12
VCO usage in various product categories has increased in previous decade. In 2002, VCO
was used only in eight variants. In 2015, it was used in 1075 variants of various categories.
Every year, new variants were launched, where VCO was used. After 2012, more number of
new variants launched in the world. 1067 variants launched in the world after 2002 with
CAGR of 29.65%. The trend of using VCO in new variants is increasing. It is expected
similar kind of trend will be in future.
5.1.1.1 Flourished Categories
Virgin coconut oil is used as raw material to flourish various other categories such as soap,
beauty products, health products, meals etc or can be used in sauces & seasoning.
Figure 2: Major categories flourished by VCO
Skincare industry is leading user of VCO followed by sauces & seasoning, soap & bath
products, hair products, colour cosmetics and health care.
Skincare
31%
Sauces &
Seasonings
28%
Soap & Bath
Products
13%
Hair Products
10%
Colour
Cosmetics
6%
Healthcare
5%
Others
7%

13
5.1.1.1.1 Skincare: Skincare category includes large range of products. This category
flourishes cosmetics industry.
Figure 3: Trend analysis of skincare’s new product launch
Usage of VCO in skincare category has increased. Every year, new products are being
launched compared to previous year where VCO was used as an ingredient in final product
except for year 2006, 2007, 2011 and 2013. In 2015, maximum numbers of VCO products
were launched till date.
5.1.1.1.2 Sauces & Seasoning: Products of this category are used for multifarious purposes
such as: cooking, sauces, food garnishing etc. This category comes under food & beverages
industry.
Figure 4: Trend analysis of sauces & seasoning’s new product launch
0
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
20
40
60
80
100
120
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

14
In 2005, only one product was launched in the world, while in 2015, 101 new variants were
launched. Over the years, more number of new VCO variants launched in this category. It is
showing increasing trend. One of the reasons behind increasing trend is health benefit of
VCO consumption.
5.1.1.1.3 Soap & Bath Products: Products of this category used to maintain personal
hygiene level. There are various variants present in this category.
Figure 5: Trend analysis of soap and bath’s new product launch
Usage of VCO in this category has increased as total number of products increased in this
category. In 2005, only 9 products were launched while in 2015, 19 variants were launched
in the world. But, new variants launch in this category is not showing a particular pattern
because of many cleft and ridges. So no specific trend can be predicted from this.
5.1.1.1.4 Hair Products: In many tropical countries, coconut oil used to as hair oil because
of superior quality over other hair oils and availability. Scientific studies proved that using
coconut oil have many beneficial effects on health.
Figure 6: Trend analysis of soap and bath’s new product launch
0
5
10
15
20
25
30
35
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
5
10
15
20
25
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

15
In 2005, only 3 new variants were launched in the world while in 2015, 16 new variants were
launched. So new variants launch has increased over the decade but we can predict the trend
due to many cleft and ridges in launch of new products. However usage of VCO in this
category has increased because total number of products in this category has increased.
5.1.1.2 Major Markets: Given pie chart represents major countries where VCO used to
flourish other categories.
Figure 7: Major foreign markets where VCO products are presents
USA market has maximum number of products where VCO has been used for many
purposes. Philippines, UK, Thailand, India, France, Germany, Canada, Indonesia and Japan
were major foreign markets.
5.1.1.3 Virgin Coconut Oil as a product
In e- resource database only 318 VCO variants are present, which are sold as product. In
recent years launch of new variants has increased due to findings of health benefiting
properties of VCO.
USA
20%
Philippines
10%
UK
9%
Thailand
6%
India
6%
France
5%
Germany
5%
Canada
5%
Indonesia
4%
Japan
3%
Others
27%

16
In 2002, no VCO variants were present in the market while in 2015, 318 variants of VCO
present. There is huge increase in launch of new variants of VCO after 2012 due to increase
in supply and demand in the world market. The trend of new products in market is increasing
over the years. And, it is expected to continue in future due to health beneficial effect of
VCO.
5.1.1.3.1 Major markets: Major demand of VCO, as an end product is from the developed
economies of world such as European nations, USA etc and manufacturing countries.
Demand drivers in in developed economies which are having more purchasing power, health
consciousness and doctor recommendations to consume VCO. Major demand driver of
manufacturing nations is promotion council and company efforts to generate domestic
demands.
0
10
20
30
40
50
60
70
80
90
100
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

17
Figure 9: Major foreign markets where VCO used as product
United States of America has most number of VCO variants in the world followed by India,
Philippines and Brazil. USA, Germany, UK and Canada has large number of VCO variants
due to published literatures on VCO benefit, doctor OZ T.V. show, doctor prescription and
health conscious population. These nations do not produce VCO to domestic demand is
fulfilled by import of VCO from tropical countries such as Philippines, India, Thailand etc.
India, Philippines, Vietnam are major producers of VCO in the world due to that large
number of VCO variants are present in domestic market but domestic consumption is very
meagre. Major reasons behind dwindle demand in these nations are lack of awareness, low
purchasing power and high price of VCO. Brazil manufactures VCO to fulfil its domestic
demand. Export of VCO from Brazil is very low.
5.1.1.3.2 Product claims: Claims are used by companies to gain competitive advantage, earn
higher economic values, gain customer confidence and loyalty. Most of the VCO products
present in developed countries are certified to earn customer trust. While in manufacturing
country products are not certified.
USA
19%
India
10%
Philippines
10%
Brazil
9%
Thailand
7%
Germany
5%
UK
4%
Canada
4%
South
Africa
4%
Vietnam
3%
Others
25%

18
Figure 10: Major claims made by company
Out of 318 VCO variants, 59% claimed organic, 21% claimed no added preservatives, 18%
cited no transfat, 17% cited no allergen and 15% claimed gluten free. Organic products have
huge demand in USA and European markets. It has become a buzz word in these markets.
Organic variants earn more economic value compare to other variants.
5.1.1.4 Major foreign markets
5.1.1.4.1 USA: In USA, VCO is used to flourish various categories. Many products are
present in USA where VCO used as ingredient.
Figure 11: Major categories where VCO are used in USA.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
Skincare
30%
Sauces &
Seasonings
22%
Soap & Bath
Products
10%
Others
38%
USA

19
Maximum numbers of skincare products are present in market followed by sauces &
seasoning and soap & bath products. In USA VCO is used mainly to flourish skincare and
sauces & seasoning products. Analyzing the trend of VCO products are showing increasing
trend. Every year some new VCO products were launched in markets. This trend is expected
to continue.
5.1.1.4.1.1 VCO as a Product: In 2002 no VCO variants was available in US markets. First
VCO product was launched in 2003. Afterwards many new VCO variants launched in US
market. Currently, 61 variants are present in US market.
Figure 13: Trend analysis of new VCO products in USA
0
5
10
15
20
25
30
35
40
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
2
4
6
8
10
12
14
16
18
20
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

20
After the launch of first variant, market experienced flood of new variants. Maximum
number of new products launched in 2005. But, no new product was launched in 2006 and
2008 due to premature market of this product and economic meltdown of 2008. Afterwards,
market experienced steady increase in variants and it is expected to grow further.
Figure 14: Major claims made by VCO manufacturers
In USA companies certify their products and claim certain things on products. Out of 318
variants 76% variants are organic certified, 31% variants claim no/low/reduced transfat,
16.39% variants claim no usage of added preservatives, 14.75% variants claim no allergen in
product and 14.75% variants claim gluten free. So USA has high demand for organic certified
products.
5.1.1.4.2 Germany: VCO has many applications. It can be used as ingredient or final
products. Following diagram represents the usage of VCO in flourishing different category.
Figure 15: Major categories where VCO are used in Germany
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Skincare
23%
Sauces &
Seasonings
48%
Soap & Bath
Products
7%
Others
22%

21
In German market, sauces & seasoning has maximum number of products, almost half of the
products belong to this category. Skincare products are ranked second in number of products.
Usage of VCO in different category products has increased in Germany as every year new
products launched in Germany.
First VCO product was launched in 2006 afterwards every year new products were launched
in Germany except 2008 and 2011. In recent years, it is showing increasing trend which is
expected to remain same.
5.1.1.4.2.1 VCO as product: Germany is one of the important foreign markets of VCO in the
world. It is one the major importer and exporter of copra oil in Europe. It imports copra oil
from tropical nations such as Indonesia, Philippines, India etc. refine that oil to serve the
domestic demand and rest quantities are exported to other European nations. Already there is
established market of coconut oil in Germany. So it has huge potential for VCO.
Figure 17: Trend analysis of new VCO products present in Germany
0
5
10
15
20
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
2
4
6
8
10
12
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

22
First VCO was launched in 2007 but in 2008, 2009, 2010 and 2011 no new products were
launched in German market. In 2012, 2013 few products were launched in market. No new
product was launched in 2014. However in 2015 eleven new products were launched. It is a
new market of VCO. It is expected to grow in future.
Figure 18: Major claims made by VCO manufacturers of Germany
94% of products are organic certified, 11.76% claim no usage of preservative/additives,
11.76% claim reduced trans-fat, 5.88% claim no allergen in product and 5.88% claim gluten
free final product. Organic products have good demand in Germany.
5.1.1.4.3 Canada: Canada is one of the leading importers of copra oil from the tropical
nations. Most of the imported copra oil used to flourish other categories of products. In
previous decade Canada started importing VCO from other nations due to its superior quality
and health benefit. VCO is used to flourish majorly following categories in Canada.
Figure 19: Major categories where VCO are used in Canada
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
Skincare
29%
Sauces &
Seasonings
33%
Soap & Bath
Products
18%
Others
20%

23
Sauces & seasoning products are major VCO products in Canada market followed by
skincare products and soap & bath products. First time VCO product was launched in 2006
afterwards new VCO products were launched every year.
Figure 20: Launch of new products where VCO have been used in Canada
Every year new VCO products were launched in Canada except 2008. That means total VCO
related product market is increased in Canada and showing increasing trend. It is expected to
show similar trend in future.
5.1.1.4.3.1 VCO as a product: In Canada first VCO was launched in 2006 and now 12 VCO
products are present in market.
0
2
4
6
8
10
12
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
1
1
2
2
3
3
4
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

24
In 2008, 2009, 2010 and 2011 no new product was launched in market. After 2011, there is
steady growth in launch of VCO products in market. It is expected to follow similar trend in
future.
Figure 22: Major claims made by VCO manufacturers of Canada
Currently 83% (10 products) are organic certified, 25% of products claim no usage of
additive/ preservative, 25% of products claim reduced/ low/no allergen in product, 8.33% of
products claim reduced/ low/no allergen in product and 8.33% of products claim gluten free.
5.1.1.4.4 United Kingdom: In UK first VCO product launched in 2003 but companies
started VCO in product in 2008. In between 2003 to 2008 no new product was launched with
VCO. VCO is used to flourish many categories of products.
Figure 23: Major categories where VCO are used in UK
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Skincare
50%
Sauces &
Seasonings
24%
Soap & Bath
Products
7%
Others
19%

25
VCO skincare products have major market presence in UK followed by sauces and seasoning
and soap. The trend of using VCO used product is increasing. Numbers of VCO products
have increased in UK and showing similar trend in Future.
5.1.1.4.4.1 VCO as product: First VCO in UK was launched in 2009 after that no new
variants was launched in 2010, 2011 and 2012. After 2012 many new variants were launched
and maximum number of variants launched in 2015.
Figure 25: Trend analysis of new VCO products present in UK
It is showing increasing trend and expected to follow similar trend in future as demand for the
product has increased in past 3 years.
0
5
10
15
20
25
30
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
0
1
2
3
4
5
6
7
8
9
10
2009 2010 2011 2012 2013 2014 2015

26
Figure 26: Major claims made by VCO manufacturers of UK
In UK 93% of total VCO products organic certified, 28.57% of products claim
low/no/reduced allergen, 28.57% of products claim reduced transfat, 36% of products claim
no use of additives and 28.57% of products claim gluten free.
5.1.1.4.5 South Africa: First VCO variant was launched in 2009 in South African market.
Afterwards market experienced steady growth in VCO variants. Every year new variants
were launched in South Africa except 2010.
Figure 27: Trend analysis of new VCO products present in South Africa
It is showing increasing trend of variants launch. It is expected to show similar trends in
future.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0
1
2
3
4
5
6
2009 2010 2011 2012 2013 2014 2015

27
Figure 28: Major claims made by VCO manufacturers of South Africa
Currently 91% of total VCO variants are organic certified, 18.18% of products claim no
allergen in product, 9.09% of products claim no usage of additives/preservatives and 9.09%
of products claim gluten free.
5.2 MAJOR EXPORTERS
5.2.1 Philippines
Philippines ranked second in coconut production and area under coconut cultivation. It is
leading exporter in coconut oil and VCO in world. It export 70% of value added coconut
products and rest for domestic consumption. Coconut farms are present in 68 out of 79
provinces. Coconut products contribute half of agricultural export of the Philippines. Coconut
farm size is 2.4 ha.
5.2.1.1 Coconut Oil
Export of coconut oil from Philippines has increased by 46% from 2003 to 2014. Export
trend has many ridges and cleft, so no specific pattern is form over the year. However, there
is increase in export over the years so it is showing increasing trend of export.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%

28
Years World USA Japan China Malaysia Canada
2003 224264 131365 46417 8924 12500 0
2004 256148 125779 55097 8359 23320 16
2005 287894 148969 51651 3845 28746 20
2006 311835 167429 52511 4769 23312 0
2007 281148 169355 59896 4380 27518 27
2008 302914 226304 48944 2900 1730 1900
2009 257239 184963 45381 4084 500 25
2010 286945 186334 46008 19525 5071 0
2011 263693 202125 42324 8822 0 42
2012 311113 251276 38787 7675 34 1988
2013 435281 293292 41312 41337 3099 2476
2014 329393 249243 56819 6680 4160 3625
Table 7: Major foreign markets for Philippines coconut oil
Major importer of Philippine‟s coconut oil is USA. In 2014 75% of total Philippines export
was done to USA. USA is also showing increasing trend of importing Philippines coconut oil.
Export to Malaysia is showing decreasing trend. Import by China is showing randomness but
overall quantity of export has been declined. Canada is showing as a potential importer in
upcoming years.
5.2.1.2 Virgin Coconut Oil
The Philippines is the leading exporter of VCO in the world. It started exporting VCO in
2001 with a volume of 1.8MT. In 2001 USA and Canada were the major foreign market of
200000
250000
300000
350000
400000
450000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

29
Philippines VCO. Today, it has reached 41 destinations such as the countries in Europe,
Asia and Pacific, Middle East, Australia and South Africa.
Export of VCO is continuously increasing from 2001 to 2015 apart from 2006, where export
slump by 2.95% of 2005 level. In recent years, rapid increase in export of VCO happened.
Year Quantity (MT) Growth rate
2001 1.8
2002 19 850.00%
2003 103 442.11%
2004 177 71.84%
2005 475 168.36%
2006 461 -2.95%
2007 1131 145.34%
2008 1639 44.92%
2009 1801 9.88%
2010 2737 51.97%
2011 4914 79.54%
2012 6002 22.14%
2013 7061 17.64%
2014 16750 137.22%
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

30
Table 8: VCO export data from Philippines
Destination 2009 2010 2014
USA 60.1 54.7 35.6
Canada 27.6 20.8 38.1
Finland 2.9
Netherlands 2.8
France 2.6
Belgium & Singapore 2.4
UK & South Africa 2.3
China 0.1 0.3 6.5
Others 10.2 17.2 6.8
Table 9: Major foreign markets for Philippines VCO
Canada, USA and China are the main foreign markets for exports of Philippines‟s VCO. The
percentage share of export to Canada and USA decreased over time. However quantity of
exports increased in same countries. Still the share of export to these two countries is large
enough. Export to China has increased significantly in recent years. Now Philippines exports
VCO to 41 countries.
5.2.1.3 Various programs/activities initiated to increase production and export
Activity Description
Production Services
Salt fertilization Fertilizing fruit bearing coconut trees through common
salt (NaCl) to increase the productivity and resistance to
diseases and insects.
National Coconut
Planting/Replanting
Planting and replanting of coconut using open pollinated
varieties in idle, open and senile area.
Maintenance of Coconut
Seedfarm/Seedgarden
Maintenance of seed farms in order to support long term
planting/replanting of coconut.
Farm
diversification(Intercropping)
Promotion of short seasonal high value crop cultivation
in between spaces of coconut tree.
Kasaganahan Sa
NiyuganayKaunlaranng Bayan
Promotion of coconut based farming system as a
lucrative agribusiness venture.
The Medium-Term Philippine
Development Plan (MTPDP) (till
2010)
Development of two million hectares of land to create
two million jobs. 1.35 million hectare land belonged to
coconut land.

31
AgrikulturangPantawidPamilyang
Pilipino Program (A4Ps) –
Coconut Planting Program
Collaborative undertaking among DA, DSWA and PCA.
PCA shall provide seedling to farms identified by
DSWA. DSWA shall pay the farmers the amount of
Php225.00 per day for a maximum of 11 days covering
the period spent for land preparation, holing and staking,
transplanting and initial care and maintenance activities.
Market and trade development
Investment/Trade promotion Participate in the trade fairs/exhibits and conduct of
missions, market match, industry dialogues to promote
coconut products, both in local and foreign markets.
Export Pathways Program (EPP)-
Regional Interactive Platform for
Philippine Exports (RIPPLES)
Program was launched in 2008, EPP is a client focused
approach to develop SME to become exporter. The
RIPPLES program aimed to increase the export share of
Philippines in world export.
5.2.1.4 Certification
Manufacturers from the Philippines are using various third party certifications such as:
Organic, Fair Trade, Kosher, Halal and ISO. International market offers lucrative prices for
certified products. Currently, there is huge demand of organic certified products in Europe
and USA. Philippines manufacturer have competitive advantage over other competing
countries due to certified products.
5.2.2 Sri Lanka
Sri Lanka ranked fifth in the coconut production and ranked fourth in area under cultivation.
It is about 20% of total cultivable land of country. Around 82% of total coconut producers
own less than 8 hectare of land. In 2012, 65% of total coconut were consumed freshly and
rest 35% of coconut distributed to flourish other value added coconut product. Sri Lanka is
one of the major exporters of desiccated coconut, coir, copra oil and VCO in the world.

32
5.2.2.1 Coconut Oil
Overall export of coconut oil from Sri Lanka has increased by 1.93 times of 2005 level.
However from 2006 to 2012 exports were decreasing and afterwards huge increase in the
export of coconut oil. Looking at the present trend it can be predicted that in near future
similar trend will continue.
Importers 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Canada 0 2 1 0 0 1 1 1 966 1306
Pakistan 352 501 542 242 494 435 591 435 304 485
UAE 32 16 0 0 0 0 0 26 16 438
USA 0 9 101 0 0 0 1 84 955 141
Belgium 0 64 0 0 0 0 0 0 0 91
Germany 0 0 8 15 0 0 0 0 24 48
UK 0 1 0 0 0 0 0 17 19 29
Japan 0 2 0 1 0 0 0 1 0 26
Saudi
Arabia
0 3 0 0 2 4 7 7 13 18
Malaysia 0 0 0 0 0 0 0 0 9 15
Australia 3 1 0 0 0 0 1 1 5 11
Table 11: Major foreign markets for Sri Lankan coconut oil
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

33
In recent year Canada becomes major foreign market of Sri Lankan coconut oil. It was the
leading importer of coconut oil in 13 and 14. Pakistan is the second largest importer of Sri
Lankan coconut oil. Import by Pakistan has not increased significantly. UAE and USA
emerged as new foreign market for Sri Lanka. Past two years they started importing coconut
oil from Sri Lanka. Belgium, Germany, UK, Japan, Australia, Saudi Arabia foreign markets
are importing small quantity of coconut oil. These markets are still to be penetrated by Sri
Lanka.
Sri Lanka is one of the leading exporters of virgin coconut oil in the world. Most of the
coconut estates which supply tender coconut for virgin coconut oil are organic certified.
International market offer lucrative price for organic products. In 2015 Sri Lanka exported
VCO to 39 countries of world.
Year
Quantity
(MT)
Growth
rate
2010 1817
2011 910 -49.92%
2012 1660 82.42%
2013 2101 26.57%
2014 7278 246.41%
2015 9086 24.84%
Table 12: Export quantity of VCO from Sri Lanka
0
1000
2000
3000
4000
5000
6000
7000
8000
2010 2011 2012 2013 2014

34
VCO export from Shi Lanka has increased by 4 times the level of 2010. Apart from 2011
increasing trend of export observed with average annual growth rate of 100.10% and CAGR
of 37.97%. Similar kind of trend is expected in future because of high demand of virgin
coconut oil in world.
Country Export Quantity (MT) (2015)
USA 3704
Japan 1299
Australia 1028
Germany 857
UK 681
Canada 337
Netherlands 295
Sweden 255
South Korea 157
Source: UCAP
Table 13: Major foreign markets for Sri Lankan VCO
2010 2011 2012 2014 2015
VCO 3977 4960 4825 5491 5856.62
Average FOB Price of Major Coconut Products per Metric Ton in USD
Table 14: Export price of VCO over the years
USA is major foreign market for Sri Lankan VCO. It imported 40.8% of total export. USA is
importing Sri Lankan VCO because of certified products availability. Sri Lanka exported
14.3% of total export to Japan followed by (11.3%) Australia, (9.4%) Germany, (7.5%) UK
and rest 16.7% VCO exported to other 34 countries. Sri Lanka received average $ 5856.62
MT/FOB in 2015, which has increased by 1.47 times of 2010 price with compounded annual
growth rate of 8.04%. Australia and European markets have demand for VCO. These markets
are relatively new markets for Sri Lankan VCO.

35
Activity Description
Coconut Replanting/New Planting Programs
KaprukaPurawara Programme One of major program launched in coconut sector of
country with aim to improve land productivity, expansion
of cultivation, increase in annual harvest of coconut to 100
nuts per palm and transfer of research to coconut harvester.
DiviNeguma Programme Livelihood initiative under which beneficiary families get at
least twoseedlings of coconut free of charge for planting in
their home gardens in order to ensure food security and
improve household income.
Coconut Rehabilitation by
Intercropping and Livestock
Integration
Various actions have been taken since 2011 to increase
productivity through intercropping such as: establishment of
data bank, continue research studies to introduce new
varieties in potential areas.
Coconut Rehabilitation by
Fertilizer Application
Government is providing subsidy on chemical fertilizers.
Farmers can get chemical fertilizers by paying 1/3 of the
cost since 2011.
Weligama Coconut Wilt
Disease Control Project
Following actions were taken to tackle wilt disease.
 Establishment of 3 km long barrier in affect areas.
 Felling of severely diseased palms to reduce the
density of pathogen;Growers were paid Rs. 2 000
per tree which is removed;
 Provision of 50 000 palms of green dwarf variety
free of charge to the small holderswhich is found to
be resistant to the wilt disease.
5.2.3 India
5.2.3.1 Coconut Oil
India is one of the leading producer and exporter of copra oil in the world. India is 7th
largest
exporter of copra oil in the world. In 2014, India exported 7381 MT of copra oil.

36
In 2014 coconut oil export from India was 1.4 times the export of 2005. But in terms of
quantity exports have increased by 20197MT, which is not a huge increment in export. In
2008, India exported 10668MT coconut oil, which was the highest in studied 10 years.
Afterwards it never reached to such level. Coconut oil exports from India is showing random
trend. In some years it increased and some years decreased. So, future pattern can be
predicted.
Years UAE USA Saudi Arabia Nepal Oman
2005 889 119 361 341 145
2006 829 181 335 197 93
2007 1379 226 353 167 18
2008 1493 221 516 36 254
2009 1787 295 529 90 382
2010 2097 446 764 225 342
2011 1976 161 674 183 370
2012 2328 420 751 317 455
2013 2643 643 1001 313 526
2014 2153 761 664 483 442
Table 16: Major foreign markets for Indian coconut oil
Major foreign markets for Indian coconut oil are UAE, USA, Saudi Arabia and Oman. UAE
is the largest importer of Indian coconut oil followed by USA, Saudi Arabia, Nepal and
Oman. Exports to these countries are showing increasing trend. UAE, USA and Saudi Arabia
can be potential foreign markets for VCO.
0
2000
4000
6000
8000
10000
12000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

37
Due to unavailability of historical export data of VCO only 24 months Indian VCO export
data were analysed. Trend analysis by quarterly showed that export quantity of VCO from
India has increased. Export of VCO were showing increasing trend till first quarter of 2015
and remain same for second quarter. Afterwards it declined in 3rd
quarter but again increased
in 4th
quarter of 2015. So it is expected in next quarter increasing trend will continue. In 2015
VCO export has increased by 140% and it is expected to grow further in future years due to
higher demand of VCO in world market.
Year Quarter Quantity(MT) Yearly(MT) Price (Dollar)
Average yearly
price (Dollar)
2014
1st 19.22
157.58
4608.599167
5084.20
2nd 18.23 5433.10997
3rd 28.10 5309.843177
4th 92.03 4985.261261
2015
1st 132.56
379.25
4953.534679
5243.82
2nd 132.14 5017.76542
3rd 41.94 6610.882024
4th 72.61 4393.099813
Table 17: Exported quantity and price of VCO from India
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
1st 2nd 3rd 4th 1st 2nd 3rd 4th
2014 2015

38
Figure 35: Indian VCO export price movements
Prices of VCO increased in 2nd
quarter of 2014 and remained constant till 2nd
quarter
afterwards it increased in 3rd
quarter and again dropped in 4th
quarter. Overall in 2015,
average VCO price has increased by 3.14%.
5.2.3.3 Major Foreign Markets
In past 24 months India exported VCO to 51 countries of world. USA is the major foreign
market for Indian VCO followed by Japan, UK, Australia, France, Mexico and Ireland.
Except USA export of VCO is very to other countries.
Figure 36: Major foreign markets for Indian VCO (quantity wise)
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
1st 2nd 3rd 4th 1st 2nd 3rd 4th
2014 2015
USA
73%
Japan
7%U.K.
4%
Australia
2%
France
2%
Mexico
1%
Ireland
2%
Others
9%

39
Figure 37: Major foreign markets for Indian VCO (value wise)
India export 73% of total export by quantity to USA but by value it contribute only 71%.
Scheme Description
Expansion of area under
coconut
Objective of program to increase the area under the
coconut cultivation by fiving assistance to small and
marginal farmers.
 Assistance of 8000/hectare for new planting
Integrated Farming for
Productivity Improvement
Objective of program is to improve the productivity of
farm through integrated approach.
 Financial assistance of 35000/ hectare foe adopting
integrated approaching in diseased affected farm
 Integrated farming for productivity improvement
on cluster basis
 Assistance for organic manure
Coconut palm insurance scheme Objective of program to assist the coconut grower in
insuring coconut palm, provide timely relief to farmers
who suffered due to sudden death of palm and minimizing
the risk and encouraging for replanting and rejuvenation.

USA
71%
Japan
6%
U.K.
3%
Australia
2%
France
2% Mexico
2%
Ireland
1%
Others
13%

40
Financial assistance under
Technology Mission
Objective of program to encourage entrepreneur for
setting up /modernizing / expanding coconut processing
units and promoting value added coconut based products.
 Provide financial assistance of 25% of project cost
limited to maximum 50lakhs whichever is
lower.The project for seeking assistance for setting
up coconut processing unit should be submitted
through the bank with a minimum of 40% of the
project cost as term loan.
Information and Information
Technology
Objective of this program is to promote coconut products,
information dissemination and encourage to producers.
Following activities are done under this.
 Participate in exhibition, conducting seminar and
workshop, awards
6. INDIAN VCO INDUSTRY SCENARIO
6.1 Inefficiencies in Indian VCO industry
In India average coconut farm size is less than 3 acres. Most of the coconut farms are owned
by small and marginal farmers. Due to this proper usage of cultivable land is not done and
resulted in low productivity of coconut.
Indian coconut farmers are not aware about organic practices and how to certify there farm as
organic. Due to aforementioned reasons organic VCO production is very low in India and
farmers, manufacturers and exporters are not able to harness the economic benefit of organic
coconut products in international market.
In India most of the coconut trees are older and senile also these trees are higher. Productivity
is affected due to lower productivity of senile tree coupled with difficulties in plucking due to
higher height of coconut. Farmers are not showing willingness to replace old and senile
plants with new superior breed of coconut plants. Primarily, a coconut tree takes 5 to 6 years
to give nut so during these five years farmers earn no money. Also, for cutting a coconut tree
they need to take government permission which is a tedious task. Now very few coconut
farms started replacing traditional coconut variety with new superior hybrid dwarf varieties.

41
Currently, there is huge shortage of coconut climbers in nut producing states. So, farmers cut
all the nuts of tree irrespective of maturity of nut. This is creating quality and wastage issues
in production of VCO because mixing of mature coconut with immature coconut.
Manufacture either sell immature coconut at lower price or use in production of VCO. If
immature kernel used to produce VCO, it creates quality issues. Either way it‟s causing loss
to manufacturer.
Farmers encounter various problems related to selling of bulk coconut to manufacturers due
to quality issues of coconut and no segregation of mature and immature coconut prior to
selling to manufacturers. Lag in constant supply of matured quality coconut is the major
problem on part of manufacturers. Farmers were not able to accumulate their produce in
required amount for supplying it to manufacturers and low production capacity per farmer
create deterrence on part of manufacturers to go for buying the produce directly from
farmers. So farmers are compelled to sell their produce to aggregator on low price.
Aggregators avail the benefits from both farmers and manufacturers by selling the low
quality produce to manufacturers at higher price and buying the produce from farmers at very
meagre price with no certain quality guaranteed product at any step. Due to lack of
professional coconut climbers in region, farmers pluck out the entire coconut from the tree at
one climbing itself which results in differing maturity period of coconut and thereby result in
quality issues in produce.
6.1.1 Low domestic demand: The domestic demand of VCO is very low in both southern
and Northern India due to multifarious reasons. People are not aware of the differences
between VCO and normal coconut oil. Marico have already marketed the presence of coconut
oil as hair oil and so other benefits of oil are not known to people as such. The need of an
hour is to break the myth regarding the coconut oil utility and generate awareness of its
numerous benefits to everyone. Domestic demand is very low due to low awareness and non-
utilisation of oil for other purposes and so manufacturers and suppliers are forced to depend
on foreign countries for export of the products.
6.1.2 Lack of potential buyer contact: Manufacturer and exporter do not have contact
details of potential buyers in and out of India. Currently, there is no government portal for
selling coconut products, where a buyer and seller can negotiate and close the deal. Presently
manufacturers are getting orders through their personal contacts or through agents. So
manufacturers are unable to utilize the full capacity of unit.

42
6.1.3 Lack of certified VCO: There are many third party certifications are available for
VCO such as: Kosher, Halal, Organic, GMP, HACCP and Fair Trade.
 Kosher refers to dietary practices rooted in Jews. In 2013, kosher product market was
$17 billion. In international markets especially in USA and other western countries
huge demand for kosher products. No Indian VCO is certified by Kosher certification
authorities. VCO from major competing nations such as Philippines, Thailand are
using Kosher certifications.
 Halal refers to dietary practices rooted in Muslims. The global halal industry is
estimated to be worth around $2.3 trillion. In international market huge demand of
halal products in Muslim dominated regions such as Asia, Middle East and Africa and
Central and South America. No Indian VCO is certified by Halal cerification
authorities. VCO from major competing nations such as Philippines, Thailand are
using Halal certifications.
 Fair Trade is a not for profit organization which ensure the decent working conditions
and fair terms of trade for farmers and workers. In developed nations there is niche
market for the fair trade certified products, which is continuously growing and
recently Fair trade has launched certificate for coconut products. No Indian VCO is
certified by Fair Trade. VCO from major competing nations such as Philippines,
Thailand is using Fair Trade certifications.
 Organic certification certifies that product is grown by organic practices. In 2013
global organic market was $72 billion. USA, Germany and France have huge demand
for organic products. Organic product market continues to grow in developed
countries. Few Indian VCOs are organic certified. Almost all VCOs from Philippines
are organic certified by USDA organic or by EU organic.
 HACCP certification certifies that specific quality standards are being maintained
during production of the product. It is very important certification for the edible
products. HACCP certified products have good international market. Few Indian
VCO manufactures are HACCP certified.
Products which are certified have good demand in USA and European markets. Also,
certified products have good market price compared to non-certified products. Indian
manufacturers are not using third party certification due to higher cost of getting certification
and unawareness about the benefit of certification.

43
6.1.4 Spoilage: Currently, manufacturers are using Indian machines for VCO production.
The spoilage rate in processing de-shelled coconut into VCO is around 5% and can go up to
10%.
6.1.5 Additional export benefit: Indian government is not providing additional benefits to
exporter of VCO such as tax benefit etc. Currently, exporters are getting 1% drawback on the
export.
6.2 Misconception in virgin coconut oil processing and labelling:
6.2.1 Process Temperature: There is misconception over using temperature for processing
VCO. Many manufacturers and people think and claim that VCO should be processed
without heat to retain the virgin quality. Producers claim that VCO processed without heat is
best in quality and better for claiming higher prices n market. VCO processed without heat
has more vitamin E content compare to VCO processed in heat. But, vitamin E content is not
high enough to be considered as deciding factor for grading of VCO. When VCO is exposed
to sunlight, vitamin E gets evaporated naturally.
Grading of VCO should be done on percentage of MCFA content and especially on lauric
acid content and not on the basis of heating or no heating. To sum up, heating of VCO should
be done till that temperature until it get discoloured or lost its health benefiting properties.
Basic criteria for any vegetable, seed or nut to be entitled as Virgin:
 The oil is not refined and not processed after oil extraction other than filtration.
 The oil should be fit for human consumption after extraction and filtration.
 The oil should retain the seed and nut should contain natural aroma after the
extraction.
6.2.2 Testa or brown skin of coconut kernel: Another misconception regarding VCO
processing is that if testa (brown skin) is not removed from kernel, it will lead to
discolouration in VCO.
Research and studies suggests that testa do not cause discolouring of VCO. Instead removal
of testa caused absence of linoleic acid in VCO. Which serves as an essential fatty acid
required by body.

44
6.2.3 Extra virgin and cold pressed label for VCO: In international market many VCO
products are labelled as „Extra Virgin Coconut Oil‟ using cold pressed technique. However,
extra virgin term exclusively used for olive oil variant. It means when olives are pressed olive
oil juice come out. Olive oil juice is a mixture of oil and water and oil can be separated
through centrifuge or settling.
When coconuts are pressed coconut milk come out, this is emulsion of oil and water. To get
oil from emulsion protein bonds needed to be broken, which can be done either by heat or by
centrifugation or by natural process or by any other means. So VCO is not qualified for extra
term.
There is no definition of cold pressed in USA and UK. It is a marketing strategy. For
extracting the oil efficiently from seed, oil need to be heated so it can flow freely. Likewise,
oil can be obtained from seed or nuts or any other plant source by pressing. But using cold
pressed technique big quantities of oil cannot be produced in a manufacturing unit.
There are some sites which mentioned term cold pressed associated with that oil
extracted/processed below 50 degree centigrade. That means VCO that is produced by drying
the fresh comminuted kernel and subsequently extracting the oil using high pressure expellers
does not eligible for using cold pressed label since temperature in expellers are higher than
50. Only VCO produced through modified natural fermentation and fresh wet centrifuge
process with vacuum evaporation can use cold pressed virgin coconut oil.
6.3 Tariff Rates
India Sri Lanka Philippines
Australia 0.00% 0.00% 0.00%
USA 0.00% 0.00% 0.00%
Germany 5.75% 5.75% 0.00%
Japan 1.50% 0.00% 0.00%
France 5.75% 5.75% 0.00%
United Kingdom 5.75% 5.75% 0.00%
Canada 5.50% 0.00% 0.00%
Netherland 4.50% 5.75% 0.00%
South Africa 0.00% 0.00% 0.00%
Korea 10.00% 3.00% 0.00%
Belgium 5.75% 5.75% 0.00%
China 4.50% 4.50% 0.00%
Finland 5.75% 5.75% 0.00%
Mexico 3.00% 14.00% 14.00%
Table 19: Tariff rates in focus market for Indian, Sri Lankan and Philippines products.

45
No countries have advantage on Australia, USA and South Africa markets. Philippines has
advantage over India and Sri Lanka in Germany, France, UK, Netherland, Korea, Belgium,
China and Finland markets. Sri Lanka has advantage over India in Japan, Canada and Korea
markets. Philippines and Sri Lanka have advantage over India in Japan and Canada. India has
advantage over Sri Lanka and Philippines in Mexican market. Sri Lanka and Philippines have
advantage over India in VCO exports. Indian government should negotiate with focus market
countries to bring down the tariff rates there. So, Indian exporters can compete with Sri
Lankan and Philippines exporters.
6.4 Currency exchange rate
Figure 38: Historical data of exchange rate of major exporter of VCO
Indian currency was the stronger in international market compare to Sri Lanka and
Philippines till 2008 that means importing of Indian products was costliest in that time.
Afterwards Philippines currency was the stronger in international market compare to Sri
Lanka and India. Sri Lankan products have advantage in international market due to weaker
currency. While now India has advantage over Philippines in exporting the products in
international market. Indian VCO manufacturer should take the benefit of this by lowering
the production.
6.4 Business environment analysis
Topics 2016 2015 2016 2015 216 2015
Starting a Business 155 164 98 104 165 157
Dealing with Construction Permits 183 184 77 106 99 94
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
160.00
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015 India (Rupee)
Srilanka (Rupee)
Philippines(Peso)

46
Getting Electricity 70 99 81 101 19 21
Registering Property 138 138 153 151 112 110
Getting Credit 42 36 97 90 109 105
Protecting Minority Investors 8 8 49 46 155 154
Paying Taxes 157 156 158 157 126 125
Trading Across Borders 133 133 90 90 95 94
Enforcing Contracts 178 178 161 161 140 139
Resolving Insolvency 136 136 78 84 53 50
Overall Rank 130 134 107 113 103 97
Table 20: Doing business rank in various parameters
Apart from protecting minority investors, getting credit and electricity India has poor or
almost equal rank in other parameter. Overall rank of India is poor in ease of doing business.
Procedure 14 8 16
Time 29 10 29
Cost (% of Income per capita) 17 18.7 16.1
Paid-in min 0 0 3.3
Table 21: Process of starting a new business
Starting a business in Sri Lanka is comparative easy because of lesser procedure requirement
and time. In India entrepreneur needs to take 14 approvals which takes minimum 29 days to
get approve. It is a very tedious and time taking procedure which is hampering investment
sentiments and discouraging Indian entrepreneurs. Indian government should reduce
procedures and numbers of days required to setup a business. This will facilitate business
friendly environment, which will help the entrepreneur to setup VCO units.
7. FINDINGS AND DISCUSSIONS
7.1 Findings from e- resource database and Export data
Data from e-resource and export data of VCO from major producers depicts huge potential of
VCO in international market due to its multifarious applications and health benefits. Export
of VCO from major exporting nations has increased in previous decade and continues to
grow.
Major foreign markets which are identified through study are USA, Canada, China, Germany,
Netherlands, UK, France, Japan, Australia, Finland, South Africa, Belgium, Singapore,

47
Sweden, South Korea and Ireland. Major producers and exporters are Philippines, Sri Lanka,
India, Thailand and Vietnam.
7.2 Findings from qualitative research
Indian VCO industry is performing poor because of various reasons
 Lack of organic/Kosher/Halal/HACCP/Fair Trade certified VCO product. Currently
certified products have huge demand in international market and also certified
products can easily pull or attract higher prices.
 Manufacturer and exporters do not have the list of potential buyers in the world.
 Higher spoilage rate during processing of VCO (5 to 10%).
 No prescribed Indian standards for VCO while Philippines has own standards for
VCO. These standards help to maintain quality of VCO.
 No facility to check for adulteration of coconut oil with VCO in India. Presently in
India, many manufacturers are mixing coconut oil with VCO. It is causing the
deteriorating quality issues and creating bad image for Indian VCO in world.
 Lower domestic demand of VCO in India due to many factors such as lack of
knowledge about health benefit of VCO, higher cost of VCO, misconception about
the VCO.
 Most of the manufacturing units only produce VCO and rest nut part such as coconut
water, shell, fibres etc. either sold or waste. They do not produce other products such
as vinegar, shell charcoal etc. It is causing lower profits to manufacturing unit.
 Smaller farm size, shortage of coconut tree climbers, lower replantation rate and
lower rate of planting of high yielding varieties are leading to low productivity.
 No segregation of mature and immature coconut at farm and aggregator level is
causing quality issues in VCO.
7.3 Other Factors
Philippines and Sri Lanka have advantage over India in Tariff rates and business
environment. These two factors are causing trouble to manufacture and exporters in getting
orders from major foreign markets.

48
8. RECOMMENDATIONS
Indian government must propose separate ITC HS code for VCO because presently it is
trading under the ITC HS code of coconut oil and all policies, rules and restrictions apply on
coconut oil also applicable on VCO so developing separate ITC HS code will help to frame
separate policies, rule, subsides for VCO. Also this will help in developing strategy for VCO
production and export.
Encourage farmers to replanting new high yielding coconut varieties by offering subsidies
and other benefits also aware manufacturer and producers about various third part
certifications such as organic, halal, kosher, HACCP etc. and work as facilitator to get these
certification.
Establish standards for Indian VCO and keep regular checks on the adherence of it. This will
help to improve the quality of Indian VCO and further enhance the image of Indian VCO in
international market.
Provide potential buyers list to manufacturer and exporters and work as agent to bring them
together. This will help the manufacture to increase the production and will bring down
manufacturing cost.
Generate awareness in local market about the benefit of VCO using below the line activities
such as pamphlet, yellow pages etc also break the myths related with VCO in North Indian
markets. This will help to generate the demand in local market.
Focus on following foreign markets USA, Canada, China, Germany, Netherlands, UK,
France, Japan, Australia, Finland, South Africa, Belgium, Singapore, Sweden, South Korea
and Ireland. Pressurize Government of India to form bilateral treaties with these countries to
bring down the tariff rates simultaneously work on reducing the process to set up
manufacturing units and work as agent to raise seed capital. Also, provide subsidies,
technology, tax exemption for initial period and quality test supports to manufacturing units.
9. REFERENCES
 FAO Office for Asia and the Pacific, 2013. Report of the FAO high level expert
consultation on coconut sector development in Asia and the Pacific region. [Pdf]

49
Available at: <www.fao.org/fileadmin/templates/rap/files/meetings/2013> [Accessed:
21 Dec 2015].
 ACIAR, 2007. A review of the future prospects for the world coconut industry and
past research in coconut production and product. [Pdf] Available at: <
aciar.gov.au/files/node/3938/Final%20Report%20PLIA-2007-019> [Accessed: 1 Jan
2016].
 Divina D. Bawlan, Keith R. Chapman, 2006. Virgin coconut oil production manual
for micro- and village scale processing. National library, Bangkok. Available at: <
ftp://ftp.fao.org/docrep/fao/009/ag094e/ag094e00> [Accessed : 31 Dec 2015]
 Divina D. Bawalan, 2011. Processing Manual for Virgin Coconut Oil, its Products
and By-products for Pacific Island Countries and Territories. SPC Suva. Available at:
<https://www.spc.int/lrd/publications/doc_download/1535-processing-manual-for-
vco-its-products-and-by-products-for-picts--chapters-1-6>. [Accessed: 7 Dec].
 Krishna, Kumar, 2015. Coconut industry opting dwarf palms due to shortage of
climbers & rising demand for packaged water. The Economic Times, 22 Aug.
 IANS, 2012. Coconut plucking could be monkey business in Kerala. The Hindu, 30
April.
 R, Ramabhadran, Pillai, 2015. Lakshadweep coconut farmers fail to cash in on
organic tag. The Hindu, 7 Jan.
 Biju, E Paul, 2014. Coconut oil in pill form. Indian Express, 10 Jun.
 Cris, Larando, 2013. Going Coconuts in the Philippines?. Indonesia Realtime, 31 Jul.
 Krista, Mahr, 2012. Why the coconut craze Isn‟t helping farmers. Time, 05 Dec.
 Sunil, C.Perera, 2007. Sri Lanka commence large scale manufacture of virgin coconut
oil. Asian Tribune, 17 Jan.
 Quintus, Perera, 2012. Sri Lanka‟s successful marketing of virgin coconut oil in UK
stores. Business Times, 04 Nov.
 Coconut Development Authority, 2011. Annual report 2010-2011. Sri Lanka:
Coconut Development Authority.
 Coconut Development Authority, 2012. Annual report 2011-2012. Sri Lanka:
Coconut Development Authority.
 Coconut Development Board, 2016. Processing technologies. [Online] Available at: <
http://www.coconutboard.nic.in/process.htm> [Accessed at: 10 Jan].

50
 Coconut Development Authority, 2016. Key products. [Online] Available at: <
http://www.cda.lk/web/index.php?option=com_directory&view=products&Itemid=12
1&lang=en > [Accessed at: 4 Jan].
 United Coconut Association of the Philippines, 2016. Calamity Survival Plan: The
Coconut as a Survival Kit. [Online] Available at:< http://ucap.org.ph/about-coconut>
[Accessed at: 6 Jan].
 Asian and Pacific Coconut Community, 2015. APCC standards for VCNO. [Online]
Available at: < http://www.apccsec.org/standards.htm> [Accessed at: 22 Dec].
 Trade Map, 2015. World Export Data. [Online] Available at: <
http://www.trademap.org/Index.aspx> [Accessed at: 28 Dec].

a
10. ANNEXURES
10.1 Annexure 1
Manufacturer Survey Form
Date: Company Name: Location:
Contact person:
Q1. What is your mode of procurement? Agent Farmer Mandi Other Please specify
Q2. Location of purchase?
Q3. How you make payments to supplier? Advance Post delivery
Q4. How you transport? Q5.Transportation charges:
Q6. Frequency of purchase?
Q7. What is the best Channel of procurement?
Q8. Are you able get require quantity and quality coconut every time? Yes No
Q9. Are you facing quality issue in procurement?
Tamilnadu:
Kerala:
Karnataka:
Q10. What is the spoilage percentage of procured coconut?
Tamilnadu: Karnataka: Kerala:
Q11. Which processing technology you use?
Q12. Spoilage percentage in processing?
Q13. Are you using imported machine? No Yes
Q13.1 If yes, then did you receive any import subsidy
(MEIS)?
Yes No
Q14. Per litre/kilogram production cost?
Q15. Are you facing quality issues during production? Yes No
Q15.1 If yes, then explain
Q16. How you sell your product? Distribution channel Sold to client Export Others
Q16.1 If own brand then which market you serve?
Q17. Is there any rejection of your product? Yes No
Q17.1 If yes, then what is the rejection rate of your product and primary reason behind that?
Q18. How much percentage of your production you export?
Q19. What are the major export destinations?
Q20. What is the main export destination?

b
Q21. What are the tests require to done?
Q22. Various involuntary certifications require obtaining before export? How difficult it is to get?
Q23. Various voluntary certifications you use to make your products more competent?
Q24. How you receive payments from clients?
Q25. Any problem in receiving the payments from
clients?
Yes No
Q25.1. If yes, please specify:
Q26. What are the government aids you get?
Q27. What aids you get from CDB?
Q28. What are the problems present in Indian coconut business?
Q29. Why Sri Lanka, Philippines, Indonesia etc have competitive advantage over India?
Q30. Possible suggestions, to tackle the competition from other nations.

c
10.2 Annexure 2
Merchant Exporter Survey Form
Date: Merchant exporter name: Location:
Contact person:
Q.1. How much you produce __________________(everyday)?
Q2. Study value chain of product
Q3. How much margins are maintained at various level of value chain
Q4. What are the quality issues that may arise at every level of value chain?
Q5. What quality measures you have taken at every level of value chain?
Q6. How much you export annually?
Q7. What channel you follow for export the products?
Q8. What are quality standards require for export of product (Imposed by India)?
Q9. How you maintain quality standard of export (demanded by India)?

d
Q10. Do you need to maintain region specific quality standards, if yes then please explain region
wise?
Q11. How you maintain quality standard of export (demanded by clients)?
Q12. Major clients are from which country?
Q13. What hurdles you face in export the products?
Q14. Possible solutions to overcome those hurdles

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