The country’s coconut oil exports dropped by more than a third in the first three quarters of the year amid tight supply of raw materials caused by the impact of Super Typhoon Yolanda on Eastern Visayas, a major coconut producing region.
Yvonne Agustin, executive president of the United Coconut Association of the Philippines (UCAP), said that CNO exports reached a total of 585,189 metric tons in January to September 2014, down by 36.1 percent from 915, 221 MT a year ago.
In September alone, CNO exports fell by 22.6 percent to 69,213 MT from 89,400 MT recorded during the same period in 2013.
“There’s a continued tightness in supply of copra, which is the raw material for coconut oil. This is expected since many of our coconut areas are still recovering from the damage sustained from the typhoon,” Agustin said in a telephone interview.
The official attributed the decline in export volume to biological or natural stress to coconut trees, limiting the available raw materials for processing. Biological stress in coconut trees usually occurs after three consecutive years of good harvest.
Agustin said that higher prices of CNO as compared to its competitor, palm kernel oil, also contributed to the continued slowdown in export volume since will shift to the cheaper alternative if there is a big price differential.
Prices of CNO averaged $1,170 per MT in September 2014, much higher than palm kernel oil which averaged at $894 per MT.
“The wider gap in prices might be attributed to seasonal factors since there is robust production of palm oil,” she said, noting that palm kernel oil stocks remained high during this period.
Agustin, however, noted that the gap in prices is currently narrowing down, providing breathing room for CNO exporters to catch up in the last three months of the year. UCAP earlier said that they expect CNO exports to reach 850,000 MT for 2014.
Coconut oil, which is used in food, cosmetics, and energy-related products, is one the Philippines’ top dollar earners. At present, the Philippines exports over 70 percent of its coconut oil produce, of which about 80 percent go to Europe and the United States.