Demand for coconuts is booming and as ageing trees threaten to curtail world supply, researchers suggest northern Australia could develop a local coconut industry.

Coconut facts and figures: Demand for coconuts worldwide has grown by more than 500 per cent in the past decade

Demand for coconuts worldwide has grown by more than 500 per cent in the past decade Coconut water is now a $300 million-plus global industry

Coconut water is now a $300 million-plus global industry World prices for coconut oil have more than doubled in the past five years

World prices for coconut oil have more than doubled in the past five years 90 per cent of global coconut supply comes from Asia

90 per cent of global coconut supply comes from Asia Australian imports of coconut oil increased by about 50 per cent in the past three years

Australian imports of coconut oil increased by about 50 per cent in the past three years Australian coconut production is very small, mostly harvesting fruit from ornamental palms

Australian coconut production is very small, mostly harvesting fruit from ornamental palms Coconuts grow in humid tropical regions and require high rainfall and warm temperatures Sources: World Bank, World Atlas, ABS trade data, The University of Queensland, IBISWorld

Australians, like many in the western world, are developing a taste for coconut.

While we have long enjoyed a dusting of dried coconut on lamingtons and other baked treats, it is now health conscious consumers that are driving exponential growth in the market for high-value products like coconut water and virgin coconut oil.

Strong niche markets are also emerging for coconut-based snacks, milk, yoghurt and ice cream, as well as coconut flour and coconut sugar, while demand for the traditional desiccated coconut remains solid.

Health nuts nuts for coconuts

Bao Vuong, a senior industry analyst with market research company IBISWorld, said the growth in products was explained by consumers buying into the perceived health benefits of coconut.

"That rising health consciousness is a big part of the market now and it's a market that needs to be tapped into," Mr Vuong said.

He pointed out that the number of brands offering coconut water products was ever expanding, with major supermarket Coles even launching its own private label coconut water.

"There is rising consumer demand for alternative products and I guess Coles is trying to tap into that market."

Nearly all the fresh coconuts and coconut products sold in Australia come from overseas, or are produced locally from imported raw materials.

Australian Bureau of Statistics trade data shows we are importing more coconut than ever before.

In the last financial year, Australia bought in more than $35 million worth of coconut oil, a figure that has almost tripled in the past decade.

Imports of fresh and dried coconut have also increased rapidly.

It is possible to source fresh locally grown coconuts in northern Australia, but coconut production is not on a commercial scale and restricted to harvesting fruit from ornamental palms in parks, along beaches and in gardens.

Most of the world's coconuts are grown in countries such as Indonesia, the Philippines, India, Brazil, Sri Lanka, Vietnam, Mexico, Thailand and Malaysia.

Coconut production is also a key source of revenue for Pacific nations Fiji, Samoa, Papua New Guinea, Vanuatu and Kiribati.

The Philippines is the world's largest producer of coconut oil and is also ramping up production of coconut water.

According to the Asian and Pacific Coconut Community, an inter-governmental agency that works to promote the coconut industry, exports of coconut water from the Philippines jumped from just 647,000 litres in 2008 to 1.8 million litres in 2010.

It then soared to 61 million litres in 2015.

Drinking coconuts imported from Thailand sell for $3.50 each at a Melbourne fruit and vegetable market. ( ABC Rural: Cath McAloon )

Looming coconut shortage

While business is booming for the Philippines' coconut industry, the country, like many other coconut producing nations, faces a looming shortage as trees age and production declines.

Uron Salum, a coconut farmer from Papua New Guinea who serves as executive director of the Asian and Pacific Coconut Community, said it was widely acknowledged that after 60 years most coconut trees passed their production peak and entered decline, producing fewer nuts.

"This is the most difficult challenge that is going to be facing the industry because some of the coconuts are way over 60 years old," Mr Salum said.

Some estimates suggest the world needs to plant a billion new trees to keep coconut production on track.

Mr Salum said the industry now faced a predicament of increasing demand at a time when farmers had not been replanting for 20 to 30 years.

"It's only in the last seven years that the industry has taken a revolutionary turnaround in terms of viability, and the higher value products came onto the market and began to be received well," he said.

"Prices became good and the issue of viability became more assured for farmers.

"Seven to 10 years ago it was very difficult to tell a farmer to replant his stock because he probably didn't see any future in it [the coconut industry]. There is now."

Coconut palms produce fewer nuts after about 60 years of age, although palms in coastal areas can be productive for longer. ( AFP: Marty Melville )

Planting more palms key

In the Philippines, there is now a concerted effort to encourage farmers to replant coconut palms, while Sri Lanka has launched a campaign to replant 6 million palms every year to ensure future supply.

Pacific governments are also giving priority to helping farmers plant more palms.

But despite these efforts, the squeeze is already being felt.

Bulk buys of 12-litre boxes of coconut water for sale at an organic store are common. ( ABC Rural: Cath McAloon )

Mr Salum said many large factories, which were established to process hundreds of thousands of coconuts each day, were now operating at roughly half their capacity.

"They can't get enough coconuts now," he said.

"There are Indonesian factories that are down to 50 per cent capacity. A Sri Lankan factory I visited is also at about 50 per cent capacity."

As many countries race to plant more trees, it is likely there will be a shortage of popular hybrid varieties of new plants.

That is where Australian research could play a crucial role.

What about a local coconut industry?

Scientists at the University of Queensland have been developing tissue culture cloning technology to produce baby coconut palm plants, known as plantlets, quickly and more cheaply.

Dr Julianne Biddle, a researcher with the University's School of Agriculture, said in working on projects to assist neighbouring Pacific nations with their coconut production, researchers began pondering whether Australia could also grow coconuts commercially.

"Australia is an ideal place to grow coconuts and yet we don't grow them here. And so we started asking these questions," Dr Biddle said.

There has been talk in the past of developing a commercial coconut industry in Australia, but it has never taken off.

Dr Biddle believes a number of factors mean the timing could now be right for a local industry.

As well as the advancement in cloning technology, which has the potential to produce plants that bear nuts more quickly, soaring consumer demand has built a strong market and good prices for value-added coconut products.

Add to that the development of new machinery, like coconut climbing robots, means labour costs of harvesting and processing coconuts could be reduced.

Could Australian grown coconuts become more widely available in the future? ( ABC Rural: Cath McAloon )

"The way that technology is advancing you could put coconuts in the ground now and within three years when you've got fruit. Imagine the changes that will have happened," Dr Biddle said.

"We'll probably have drones picking coconuts for us.

"In the last six months we've had four producers contact us who are interested in planting areas to coconut in northern Australia and I expect that the interest will continue to increase."

One potential grower was considering planting 150 hectares of coconuts in the Northern Territory.

"If you are planting 125 coconuts per hectare and you can get about 200 coconuts per plant, you're getting about 25,000 coconuts per hectare, per year," she said.

"And if you are just selling those as, say, a whole drinking fruit for $2 each, you'd end up with about $50,000 per hectare."

Could coconut oil be the new olive oil?

Dr Biddle sees potential parallels between Australia's olive oil industry and a new virgin coconut oil industry.

"People planting olives were criticised initially and they've done so well," she said.

"It's been a lot of good product branding, encouraging people to visit the region and really own the brand. I think that could be something we could work towards in the coconut industry, for sure."

Dr Biddle predicts a local coconut industry would also bring benefits for Australian consumers.

"A lot of people would argue that the fresh products that are coming into the country are not being well looked after and that people are getting products on the shelves in supermarkets in the fruit section that are rancid before they even arrive," Dr Biddle said.

"[If we had a local industry] you would have much better access to fresh drinking coconuts.

"When you get it off the tree fresh it's effervescent and it's beautiful and it quenches your thirst."

Mr Salum of the Asian and Pacific Coconut Community also sees potential in a coconut industry in Australia's north, and said demand for the product is only likely to increase.

"As long as the population is increasing in the world, I believe the demand for coconuts will also grow."