The Philippines’ coconut oil exports declined by nearly a third in the first four months of the year as supplies of raw materials continued to tighten after the drought that hit major coconut producing areas nationwide, the United Coconut Association of the Philippines (UCAP) said Tuesday.
UCAP executive director Yvonne Agustin, citing preliminary data, said that CNO exports reached 209,982 metric tons in January-April 2016, down by 31.8 percent from the 308,050 MT recorded during the same period last year.
“There is a continued tightness of copra, the raw material for making coconut oil, as a result of the El Niño, resulting in lower CNO production for the period,” Agustin said in a telephone interview.
In April 2016 alone, CNO exports remained relatively flat at 54,500 MT compared to 54,776 MT during the same period a year ago. The official added that April’s shipment volume was also significantly lower than the ideal average monthly shipment of 80,000 MT.
During the period, prices of CNO averaged $1,580 per MT, higher than its competitor palm kernel oil at $1,298 per MT.
A bigger price differential usually results in buyers shifting to the cheaper alternative.
The official noted, however, that higher prices of CNO have little to do with the weak shipment volume, stressing that availability of raw materials remained the biggest concern among coconut oil producers.
“The dry weather condition has been felt in most of the coconut areas in the country. Copra production has been weak since late last year as El Niño strengthened,” she added.
Meanwhile, Agustin said the coconut oil industry is expected to bounce back in the second half of 2016 as wetter weather conditions as a result of La Niña are forecast to prevail over the large part of the country. La Nina usually ensues after an El Niño episode.
“There will be significant improvement from last year. But we have to remember that we have a very low base comparison,” she added.
For this year, the CNO industry has set a lower export target of 750,000 MT primarily due to the drought.
In 2015, CNO exports slipped 1.5 percent to 843,710 MT compared to the 856,973 MT in 2014. Despite the weakness in demand, the industry was able to exceed the full-year shipment target of 804,000 MT.