Market evolution: Coconut palm kernel babassu oils (CN 1513) — 2015–2025

Introduction

This report analyzes the trade dynamics of Combined Nomenclature code 1513—covering coconut, palm kernel, and babassu oils and their fractions—for the European Union from 2015 to 2025. The data reveals a market characterized by a dramatic increase in the EU's financial exposure to imports, significant price escalation, and structural shifts in both intra-EU specialization and external sourcing. While import volumes have remained relatively stable, their value has surged, widening the trade deficit and heightening the EU's net import reliance. The following sections detail these core trends.

The Surge in EU Import Reliance and Price Escalation

Over the 2015–2025 period, the EU's trade in CN 1513 products underwent a fundamental transformation where value growth vastly outpaced volume growth, indicating a period of sustained price inflation and increasing financial dependency on external suppliers.

The trade deficit widened primarily due to soaring import values, not volumes

The EU's net import reliance increased by 708.2%, from -6.2% in 2015 to 37.5% in 2025. This stark shift is driven by a divergence between value and volume trends. While EU import quantities declined by 7.3% over the decade, the total value of imports increased by 84.0%, culminating in a peak value of €2.35 billion in 2022. This implies that the average price paid for imports nearly doubled.

Average import prices reached record highs, with a pronounced spike in 2022

The average import price rose by 98.6%, from €972 per tonne in 2015 to €1,929 per tonne in 2025. This increase was not linear; prices climbed sharply in 2017 and then accelerated again from 2021, peaking in 2022 at €1,929 per tonne. This price trajectory reflects global commodity market pressures, including supply chain disruptions and increased demand for vegetable oils.

Export values grew, but this was an effect of price, not increased EU trade volume

Interestingly, the value of EU exports increased by 59.3% while their volume decreased by 22.2%. Consequently, the average export price more than doubled, increasing by 104.8%. This indicates that the EU's role as a re-exporter or processor for external markets became more lucrative per unit but also smaller in physical scale.

Structural Shifts in EU Production and Market Specialization

The EU market for CN 1513 oils evolved with notable changes in production patterns, member state specialization, and the consolidation of import sources.

Domestic EU production value and volume surged, altering the market balance

Despite being a major importer, the EU's reported domestic production for these oils increased by 898.7% in quantity and 1,220.3% in value between the first and last periods of available data. This explosive growth suggests a significant expansion in EU-based refining or fractionation capacity, likely using imported crude oils as feedstock.

Specialization became concentrated in a few key EU member states

Trade specialization analysis reveals a stark divide. The Netherlands emerged as the most specialized EU economy in CN 1513 products (RSCA of 0.629), reflecting its role as a major refining and logistics hub. Spain and Slovenia also showed strong specialization. In contrast, economies like Estonia, Ireland, and Luxembourg were highly unspecialized (RSCA near -1.0), indicating minimal engagement in this specific product category.

Import sourcing remained concentrated, with the Philippines and Indonesia dominant

The supply base for EU imports remained highly concentrated. The Philippines and Indonesia were consistently the top two partners, collectively accounting for the majority of import value. While the concentration index (HHI) for imports remained stable, the roles within the top seven partners shifted: Guatemala and Honduras saw explosive growth in their shares, growing by 753.9% and 169.1% respectively by value, diversifying the Latin American contingent.

Supply Chain Vulnerabilities and Trade Shocks

The EU's growing financial dependence on CN 1513 imports is mirrored in metrics of trade intensity and was punctuated by specific, detectable market shocks.

Trade intensity and export propensity both increased significantly

The EU's trade intensity for CN 1513 products grew by 328.9%, reaching 74.4% in 2025. This means that trade (imports + exports) became a much larger component of the EU's total availability of these oils. Similarly, export propensity rose by 287.7%. These figures underscore the EU economy's deep integration into global supply chains for these fats and its increased exposure to international market volatility.

Supply relationships exhibited varying degrees of price volatility

An analysis of the coefficient of variation (CV) for import partners shows that some sources were significantly more volatile than others. For instance, Guatemala and Costa Rica exhibited very high CVs (0.51 and 0.87), indicating large swings in the value of their shipments to the EU. In contrast, traditional partners like the Philippines showed much lower volatility (CV of 0.14).

The market experienced detectable price shocks in 2021 and 2022

The data flags specific shock events. In 2021, a major price shock for exports to Ukraine was detected, with an abnormality score of 65.3 and a 173.7% price shift. More significantly for the import side, a price shock from Malaysia occurred in 2022. This shock had an abnormality of 4.2 and a 109.5% price shift, impacting a source that accounted for 23.2% of import value that year. This event aligns with the global commodity price surge observed in 2022.

Conclusion

The 2015–2025 period for EU trade in coconut and palm kernel oils was defined by a structural increase in vulnerability. The EU's net import reliance soared as the value of its import bill grew dramatically, driven by price increases rather than volume growth. While EU domestic production expanded, the bloc remained heavily dependent on a concentrated set of Southeast Asian suppliers. This dependency, coupled with high trade intensity and exposure to detectable price shocks, presents a clear picture of a sector where the EU's economic exposure outpaced its physical import needs, highlighting significant strategic considerations for supply chain resilience.