Rehabilitating an industry that has the potential to become a core revenue earner for the Federation

After more than two decades of declining copra production, the Federated States of Micronesia is now making steady progress toward rehabilitating an industry that has the potential to become a core revenue earner for the Federation. How did we get here, and, what will we do to achieve this?

In June 2014, the 18th FSM Congress passed Public Law 18-68, commonly known as the ‘Coconut Tree Act’. This act dissolved the FSM Coconut Development Authority (CDA), and transferred this authority along with all of the CDA assets and personnel to the FSM Petroleum Corporation, otherwise known throughout Micronesia as Vital.

Vital believes that with requisite capital and technical inputs and with a unilateral conformity of purpose across the FSM Leadership, it will be able to get the most out of an under-utilized resource. We want to significantly enhance the capacity for the buying, selling, exporting, manufacturing, processing, and distribution of copra and other products from the coconut tree in the Federated States of Micronesia.


Here is a primer on the more pressing questions regarding expansion and the economic opportunities of the coconut industry in FSM:

Q. Which islands or regions are in play for processing facilities?

A. There are seven producing regions identified throughout FSM: Kosrae, Pohnpei, Pohnpei Outer Islands, Chuuk Lagoon, Chuuk Outer Islands, Yap, and Yap Outer Islands. All of these regions have sufficient coconut resources to support various levels of processing and have expressed a willingness to participate in the industry. Vital will take a phased approach. We are now upgrading the only existing processing facility in FSM in Pohnpei to process up to 5 tons of copra, or 25,000 coconuts per day. That equals about 10,000 pounds of copra per day, or roughly 100 x 100 pound bags processed daily. This copra will be sourced from the Pohnpei, Chuuk and Yap Outer Islands. In addition, the Pohnpei facility is currently conducting the first trials of whole nut processing up to 1,500 fresh husked coconuts per day, or roughly 30 x 50 pound bags of husked nuts processed per day. These will be sourced from farmers in Pohnpei.

We will also build a 10,000 coconut per day processing facility for whole nuts in Chuuk Lagoon, in conjunction with a planned power initiative with the Chuuk Public Utilities Corporation. The Chuuk Lagoon islands of Tonoas, Fefan, Uman, Etten and Weno are expected to provide the initial supply of nuts for this facility. Once built, additional opportunities for expanded production and new processing plants will be explored to include the other regions of FSM.

Q. What will you produce?

A. Currently, we are making Crude Coconut Oil (CNO) from copra at our Pohnpei facility, with the copra meal as a by- product to be sold as animal feed. The whole nut processing line in Pohnpei also produces smaller quantities of Virgin Coconut Oil (VCO) both for cooking and cosmetic use, and a range of luscious soaps which are currently available for purchase from stores and hotels in Pohnpei.

In Chuuk Lagoon, the facility will be built for the production of a number of high value food products from the start, including VCO, copra meal as animal feed, coconut flour, coconut water, and from the shells, activated carbon also known as bio-fuel. 

Q. How will farmers, communities and the nation as a whole benefit?

A. Farmers will benefit by having a stable and continuous market for their resource. If they want to sell a coconut, Vital will buy that coconut, every day of the week, 365 days a year. As a result farmers for the first time will have a dependable and timely income throughout the year. This will open up other opportunities for farmers to access capital and micro-financing for home improvement or entrepreneurial growth. Communities or producer groups (Co-operatives) will have the opportunity to organize and plan for community development initiatives around the regular supply of coconuts.

Communities will also benefit from both the creation of formal and informal jobs as the coconut industry develops over time. At a community-level, the aggregate income from regularized trade in coconuts and other agriculture will allow communities to become less dependent on government and foreign aid, increase food security and enhance long-term opportunities for all sections of society, including youth. The FSM as a whole will be able to better prepare for life beyond 2023 (end of US Compact Agreement), and add another key revenue earner for the nation, estimated to bring in over $8MM per annum in export earnings within five years.