South Sumatra coconut prices fall to Rp1,800 as export demand weakens

Farmgate price drops by more than half

Coconut farmers in South Sumatra are facing a sharp decline in prices as weaker export demand exposes the region’s dependence on sales of raw agricultural commodities. IDN Times reported that the farmgate price fell from about Rp4,000 to Rp1,800 per coconut in August 2026. The decline had lasted for roughly six months and was linked partly to softer demand from export markets.

The pressure is particularly relevant for Banyuasin, one of South Sumatra’s main coconut-producing areas. Data from the Banyuasin regency government put smallholder coconut plantations at 48,266 hectares and production at approximately 46,927 tonnes in 2023. At that scale, a prolonged fall in unit prices directly affects farm income and the ability of growers to finance maintenance, harvesting and replanting.

Authorities promote downstream processing

The South Sumatra Regional Inflation Control Team, known as TPID Sumsel, is encouraging greater processing of coconuts within the province. Bambang Pramono, head of Bank Indonesia’s South Sumatra office and a member of TPID Sumsel, said downstream development was being pursued as a solution. He also said agriculture and other sectors with economic potential had not yet been fully optimized.

Processing could give producers access to several markets rather than leaving them dependent on prices for whole coconuts. Products already shipped from South Sumatra include desiccated coconut, coconut sugar, coconut-shell charcoal and coconut chips. However, local industry development remains insufficient to prevent movements in overseas demand from passing quickly through to farmgate prices.

Processed products reach China, France and Taiwan

South Sumatra’s processed coconut products have been exported to France, China and Taiwan, according to the trade information cited by IDN Times. Shipments to China included 46 tonnes of coconut-shell charcoal and 25 tonnes of coconut chips. Other reported exports comprised 3 tonnes of desiccated coconut and 5,000 units of coconut sugar, although the source did not specify their destination markets.

Statistics Indonesia data for South Sumatra cited in the report placed the value of exports from various commodities at Rp1.6 billion in the second quarter of 2026, including processed coconut products. The product volumes show that processing channels exist, but the continued price decline suggests they are not yet large enough to absorb the province’s available coconut supply.

Industry organization seeks stronger farmer position

Muhammad Asri Lambo, organizing committee chairman for the second national congress of the Indonesian Coconut Farmers Association, PERPEKINDO, said price weakness was being felt in several production centers, including Banyuasin. He argued that price, industrial development and downstream-processing problems required a stronger organization to represent farmers’ interests.

Expanding processing would require reliable purchasing, suitable plants and stable sales channels for each derivative product. Coconut-shell charcoal, chips, sugar and desiccated coconut serve different customers and cannot absorb raw material interchangeably without appropriate equipment and quality controls. For South Sumatra, the immediate test is whether processors can increase purchases fast enough to support farmgate prices while export demand remains weak. Longer term, a broader mix of processed products could reduce, though not eliminate, the exposure of growers to changes in any single overseas market.