DAVAO CITY: Faced by widespread low buying prices of copra in the Davao Region and growing complaints of coconut farmers, the coconut industry cluster here is bent on setting up a trading firm to be owned by coconut farmers’ cooperatives.
“Coconut farmers are still griping about low buying prices of copra, it’s about time they set up their own trading outfit to sell copra directly to oil mills and get better buying prices,” says coconut cluster coordinator Rosella Villaruel, a project officer of the Philippine Coconut Authority (PCA), in a recent monitoring report early this year to consultants of Japan International Cooperation Agency (JICA).
Coconut cluster members who are coco farmers themselves, said that the breakeven buying price of copra is P25 a kilo as quoted by copra traders in the four Davao provinces. This is the price by which they can recover their costs of labor and production—no profit.
To make up for lost earnings from copra, coconut farmers are now selling their husks to make coco coir and coco shells to make charcoal.
Copra prices sometimes range from P34 to P37 when supply of copra is tightening up in the world market, but declines to P25 to P28 when supply is good and volume is up, according to industry sources.
Commodity trading of copra in the world market usually dictates the buying price of copra, according to Villaruel, based on market forces of supply and demand. Copra oil millers in Davao, as a rule, based their buying price on world market prices.
A trading firm set up by farmers’ coops will mean that coconut farmers can by-pass local copra traders in selling their copra and instead sell to their own trading outfit at higher buying prices. Local traders usually put a margin of 20 percent to 30 percent on the buying price for their own profit.