PHILIPPINE coconut oil exports dropped by almost 10 percent in the first two months of the year as supply of raw material remains tight due to El Niño, the United Coconut Association of the Philippines (UCAP) said Friday.
Citing preliminary data, UCAP Executive Director Yvonne Agustin said coconut oil exports reached 110, 203 metric tons (MT) in January-February 2016, down 8.08 percent from 119, 897 MT a year earlier.
“We can see that the industry is slowly recovering. But reports from the ground continued to show tightness of supply of copra because of the persistent dry weather,” Agustin said in a telephone interview.
In February, shipments rose by 2.2 percent to 60,525 MT from 59,179 MT recorded in February 2015.
The volume in February was also significantly lower than the ideal average monthly shipment of 80,000 MT.
Coconut oil fetched $1,216 per MT in the first two months of the year, compared to $985 per MT of palm kernel oil. Palm oil was pegged at $631 per MT, while soybean oil average at $687 per MT.
“Lower prices of other oils compared to CNO may be a factor why there’s a weak demand from buyers. It may also be just the result of the drought, which resulted in tight supply of raw materials,” Agustin said.
Weather bureau Pagasa has warned that El Niño will intensify through the last quarter of 2015 to the first half of 2016.
This year, the coconut industry has set a lower export goal of 750,000 MT due to the drought.
In 2015, coconut oil exports slipped 1.5 percent to 843,710 MT from 856,9730 MT in 2014. The industry was able to exceed full-year target of 804,000 MT last year.
Agustin expects the coconut oil sector to recover in the second half, banking on wetter conditions as a result of La Niña, which ensues after an El Niño episode.