MANILA: The country’s coconut oil (CNO) industry is off to a good start this year as exports surged by 87.1 percent in January, the United Coconut Association of the Philippines (UCAP) said Thursday.
UCAP executive director Yvonne Agustin said CNO exports reached 79, 250 metric tons (MT) in January 2015, or 87.1 percent higher than the 42,360 MT recorded during the same period last year.
“This is a welcome development – after failing to reach last year’s target -since we hit the monthly shipment average of 80,000 MT. But we have to remember that we have a low baseline figure at the start of last year,” Agustin said.
Nonetheless, the official expressed optimism that they will continue to hit the average export figures in the first three months of 2015 as traditional buyers replenish stocks.
Coconut oil, which is used in food, cosmetics, and energy-related products, is one of the Philippines’ top dollar earners.
At present, the Philippines exports over 70 percent of its coconut oil produce, of which, about 80 percent of the shipments go to Europe and the United States.
Agustin attributed the higher exports volume to the narrowing gap in prices of CNO and its competitor, palm kernel oil.
A bigger price differential usually results to buyers shifting to the cheaper alternative.
Prices of CNO averaged USD 1,137 per MT in January 2015, higher than palm kernel oil at USD 1,010 per MT.
For this year, the CNO industry has set a lower export target of 804,000 as Yolanda-stricken areas of Central Philippines may take another 4-5 years before it can go back in the production stream.
The region accounts for over 15 percent of total CNO production.
In 2014, CNO exports reached 795,297 MT, lower than the 850,000 MT target.
Last year’s export figures were also lower by 27.5 percent from the 1.096 million MT in 2013.
Agustin attributed the drop in exports to severe disruption of copra supply because of the typhoon along with the natural biological stress to coconut trees.
“The coconut sector, particularly farmers in Eastern Visayas, is still reeling from the damage caused by super typhoon Yolanda,” she said, adding that this resulted to tightness in supply of copra, the raw material for coconut oil.
“We are not expecting an immediate contribution to export figures in Yolanda-affected areas because it may take several years for them to recover. If ever there will be increase in supply of raw materials, the growth will come from other areas such as Bicol,” Agustin said.
In the aftermath of typhoon Yolanda, the Philippine Coconut Authority reported that over 34 million trees have been confirmed damaged in Samar, Leyte, and in Western Visayas.
This comprises 10 percent of 340 million coconut trees in the country.
Nevertheless, Agustin noted the positive development in the recovery of coconut trees affected by biological stress because of ample amount of rainfall in the previous months.
Biological stress is common to coconut trees, and usually occurs after three consecutive years of good harvest.
Likewise, the official allayed fears over possible effects of the El Niño phenomenon, saying that the prolonged dry spell will have “minimal” impact to coconut crops.
“Negative effects will be felt in the next year’s production. But since it is just a mild El Nino, we will not be affected,” she said.
“Based on studies, dry spell to coconut trees should be four straight months of rain under 50 millimeter. So a major rainfall could easily mitigate the impact of El Nino,” Agustin said.