By Vichael Angelo D. Roaring / Commercial Counsellor Philippine Trade and Investment Center, Mexico City


Part One


Global context

The Food and Agriculture Organization (FAO) said the global demand for coconut and its derivates is growing at more than 10 percent per year, outpacing production supply which is growing at only 2 percent.


According to Hiroyuki Konuma, FAO Deputy Director General for Asia and the Pacific, “Almost 90 percent of the world’s coconuts and other products derived from coconuts originate in the Asian region, but the sector has problems and needs rehabilitation.”


“There is a need for replanting and rehabilitation of coconut trees,” Konuma said in the framework of the High-Level Regional Consultation on Coconut Development in Asia and the Pacific that brought together delegates from 13 countries in the region.


The Asia-Pacific region is the largest producer and exporter of coconut products. The sector is of vital importance for the economies of many countries, especially for small island states. Analysts estimate the Asian coconut crisis could open markets for producers in other regions, such as Central America.


Mexico´s coconut story

In Mexico, the 1940’s, ‘50s and ‘60s saw the demand for copra grew so much that the cultivation of coconut palm reached 200,000 hectares, with the states of Guerrero, Colima, Tabasco, Michoacan and Oaxaca as the main producers. While current official statistics said 80,000 hectares are currently allocated to coconut cultivation, the reality is there are just about 20,000 productive hectares.  The rest of this land grows less than 10 coconut trees per hectare, with trees more than 30 years old. The land is mostly used to cultivate more profitable crops such as sugarcane, papaya, banana and lemon.


Why did coconut production collapse in Mexico? During the 1970s and ‘80s there was a crisis in the coconut sector, caused by deterioration in the prices paid to the producers, which was a consequence of the growth of brokers and middlemen.  At a time when 40 percent of the plantations were more than 30 years old and had low productivity, increased production costs affected the maintenance of plantations and fertilizer levels.  Global market demand was also a factor, as consumption of coconut oil dropped in the USA during the 1980s and 1990s.  This was primarily  caused by the American policies of encouraging consumption of their own oils such as soy oil. The smear campaign on coconut oil as an unhealthy product because of high levels of fat and lauric acid affected the world’s largest producers of coconut oil including the Philippines, Indonesia, India, Sri Lanka, Brazil, Papua New Guinea, Malaysia, Vietnam and Mexico.


In México, most producers, particularly the small ones, stopped planting coconut trees and switched to crops with higher market demand. Other farmers abandoned the farming lands; pests appeared and decimated farmlands on the Atlantic side of the country.


More than two decades passed before the industry was able to take off. The newfound popularity of coconut was driven by the health benefits of drinking coconut water, thanks to its high content of potassium, amino acids and vitamins.  Coconut water became a new health drink of choice, especially in the US and Europe. The countries that benefited from this new coconut boom were the Philippines Indonesia, India, Sri Lanka, Thailand, Malaysia and Vietnam.


In Mexico the demand started in 2010, with the arrival of some Thai, American and Brazilian brands. Later, some Mexican brands appeared in the market, produced by local companies, like Valle Redondo (Coco Dream), Coco Colima (A de Coco), TerraFertil (Coco!Nut Water), Calahua (AcapulCoco) and Del Valle (Coco Niau). Among them, Coco Colima has been the largest producer; it has more than 2,000 hectares of coconut palm and works with more than 1,500 families dedicated to the production of the crop. This allows the company to reach 10,000 hectares of coconut palm, which is almost half of the productive farm lands planted to coconut in Mexico.


Domestic Mexican sales of coconut water increased six-fold in the last three years, from 1.7 million liters in 2013 to almost 11 million liters at the end of 2016. Swedish packaging company Tetra Pak estimates that by the end of 2017, Mexicans will consume 12.4 million liters of coconut water, a 13- percent growth.  To be concluded •