Jakarta (ANTARA) – Malaysia remains heavily reliant on Indonesia for its coconut supply, with around 80 percent of the country’s demand met by Indonesian exports, according to the Indonesian Ministry of Agriculture.The agricultural product quality inspector at the ministry's Directorate General of Plantation, Agus Rosyid, said Malaysia’s strong reliance on Indonesian coconuts presents an opportunity to strengthen the domestic coconut industry, particularly through downstream process.”Malaysia relies on Indonesia for nearly 80 percent of its coconut needs. Two years ago, when they faced a raw material shortage, they asked the ministry not to impose an export ban out of concern for their domestic industry,” he said on Wednesday.Speaking at a discussion in Jakarta, Agus noted strong regional and global market demand highlights a significant opportunity for Indonesia to increase the added value of its coconut products.Derivative coconut products with strong market potential include coconut cream, coconut milk, coconut oil, virgin coconut oil (VCO), and various other processed items.Therefore, the government is encouraging a shift from exporting raw coconuts to producing value-added products, allowing more economic value to be retained domestically.According to 2023 data from the International Coconut Community (ICC) and the Ministry of Agriculture, Indonesia is the world's second-largest coconut producer after the Philippines.National production reached 2.87 million metric tons of copra equivalent across approximately 3.34 million hectares of plantations, accounting for about 24 percent of global production.Agus said that around 98 percent of the country's coconut plantations are owned and managed by smallholders, involving approximately 5.5 million farmers.ICC and ministry data showed that of the total plantation area in Indonesia, about 2.55 million hectares, or 76.5 percent, consists of productive trees.The potential for value addition remains significant across the entire coconut value chain from the husk, shell, and meat to the coconut water, with an estimated total value-addition potential of US$6.55 billion.According to ICC data, Indonesia's coconut product exports were valued at approximately US$2.11 billion in 2022.However, the Ministry of Agriculture noted that national plantation area and production have been declining due to several factors, including land conversion to other commodities, pest infestations, and unstable farmgate prices.In addition, national productivity remains relatively low, averaging around 1.1 metric tons per hectare, well below the estimated potential of 3.5 to 5 metric tons per hectare.To improve the commodity’s competitiveness, the government is preparing a coconut downstreaming program with 151,554 hectares of land targeted for development in 2026, supported by a budget of roughly Rp427 billion (around US$23.8 million).The initiative will span 28 provinces, focusing on developing production zones, high-yield seed supply, productivity enhancement, and supply chain strengthening.