Staying cool in summer is becoming pricier due to a surge in coconut oil prices, an essential ingredient for ice cream. The wholesale price for Philippine coconut oil delivered in Rotterdam hit $2,800 per tonne at the end of May, almost double the preceding year’s price. The production of coconut oil has been hampered by adverse weather in Indonesia and the Philippines, which produce most of the global supply, resulting in increased ice cream prices, with UK supermarket ice lollies and cones seeing a 7.6 percent rise in May, according to business consultancy RIFT.
The $81 billion global ice cream industry watches these market changes closely as coconut oil helps maintain the solid texture of ice cream at room temperatures. Weather patterns such as El Niño have caused drier conditions in Southeast Asia, reducing coconut yields and supply. Furthermore, the US Department of Agriculture expects global coconut oil production to decrease by 5 to 10 percent in the 2024-2025 season.
The Philippine government’s push to increase the use of coconut oil in biodiesel production has also driven up demand and prices. Biofuels now require more coconuts than before, with plans to use up to 5 percent of the country’s coconut crop by 2026.
Additionally, the high cost of cocoa is leading to increased substitution with coconut oil in chocolate products, providing another source of demand. Social media and celebrity endorsements have further popularized coconut oil for its supposed health benefits, increasing its use in makeup and beauty products.
However, boosting coconut production to meet demand is difficult due to the time it takes for trees to mature and the limitations imposed by deforestation concerns and environmental laws. With a strong demand and constrained supply, Pohlmann Gonzaga, a commodity trader, foresees high coconut oil prices continuing into next year. The operating costs for ice cream production will likely remain high, potentially leading consumers to seek sorbet alternatives.
Source: https://www.aljazeera.com/news/2025/6/7/why-are-ice-cream-prices-soaring-this-summer?traffic_source=rss
