Indonesia is moving forward with its plan to strengthen the downstream processing of agricultural commodities, with the coconut sector being the pilot project 

Minister of Investment and Head of the Investment Coordinating Board (BKPM), Rosan P. Roeslani, has announced that construction of a new coconut processing facility in Morowali, Central Sulawesi, is expected to be completed next year.

The project has already attracted US$100 million (Rp1.66 trillion) in investment and is projected to create around 10,000 jobs for local communities.

“In shaa Allah (God willing), by mid-2026 the plant in Morowali will be completed and capable of processing 500 million coconuts annually,” Rosan said during a hearing with Commission XII of the House of Representatives (DPR) on Tuesday, December 2, 2025.

He cited that this investment opportunity emerged as Indonesia observed a strong export trend of coconuts to China. The government then approached Chinese partners and managed to encourage them to establish processing operations directly in Indonesia.

“As a result, coconut prices here can increase since there is no longer a need to account for logistics costs to China,” Rosan noted.

Beyond Morowali, the government also plans to expand similar downstream initiatives to other coconut-producing regions, including Riau in Sumatra.

The initiative aligns with the national strategy to enhance value-added production and increase export earnings from key agricultural and plantation commodities. Agriculture Minister Andi Amran Sulaiman previously stated that Indonesia exports 2.8 million tons of coconuts annually, worth approximately Rp24 trillion.

The government aims to turn more of these raw exports into higher-value products such as coconut milk and virgin coconut oil (VCO).

“The value can rise a hundredfold. On average, this sector could generate Rp2,400 trillion. Even if we take only half, multiplied by 50, it could still produce Rp1,200 trillion in foreign exchange. And that’s just from coconuts,” Amran said during a press briefing at Merdeka Palace on October 9, 2025.

Balancing export and domestic demand

Trade Minister Budi Santoso said there is currently no plan to restrict the export of whole coconuts. However, the government will regulate domestic distribution to ensure supply remains stable across the country.

Data from Statistic Indonesia (BPS) shows that in the first quarter of this year, Indonesia exported US$45.6 million worth of coconuts in husk and US$5.9 million worth of dried coconut meat. China was the largest destination, with imports valued at US$43.1 million.

“The price of whole coconuts abroad is currently very good, and farmers are finally enjoying strong returns ‒ something we haven’t seen before,” Budi said on August 22, 2025.

He acknowledged that rising export demand has pushed up coconut prices domestically, particularly in western Indonesia. To ensure price stability and fair access, the ministry plans to improve distribution by channeling coconuts produced in the eastern regions to the west.

“This way, both domestic and international trade of whole coconuts can thrive, and everyone can benefit,” he emphasized.

With growing investment, job creation, and export potential, Indonesia is positioning its coconut industry as a powerhouse in the global market ‒ transforming raw commodities into high-value products that support national economic growth.