Philippine coconut oil (CNO) exports fell sharply in the first three months of the year due to fewer raw materials as a result of a natural slowdown in production, as well as the damage caused by Super Typhoon Yolanda in major coconut-producing areas.
CNO exports dropped 54.1 percent to 174,210 metric tons in January to March 2014, from 379,470 MT a year earlier, said United Coconut Association of the Philippines (UCAP) executive director Yvonne Agustin.
In March 2014 alone, CNO exports were pegged at 59,950 MT, down by 61.9 percent from 157,170 MT in March 2013.
Agustin attributed the declining CNO exports to the tight supply of raw materials—dried coconut meat or copra—in the domestic market after two years of successive good production, which stressed coconut trees.
Devastation wrought by Yolanda in November 2013 also hampered the normal supply and delivery of copra to mills nationwide, she added.
The Philippine Coconut Authority (PCA) said that more than 34 million trees have been confirmed damaged by Yolanda in Samar, Leyte, and in Western Visayas. This comprises 10 percent of 340 million coconut trees in the country.
“It’s a double whammy for the industry,” Agustin said in a telephone interview.
In terms of prices in the international market, CNO exporters continue to enjoy premium at $1,389 per MT, compared to its competitor palm kernel oil at $1,378 per MT.
In the previous month, CNO was at $1,350 per MT while palm kernel oil prices averaged $1,281 per MT.
“It’s a good thing that prices of palm kernel oil were able to catch up faster in March. A wider gap in the prices may result in buyers shifting to palm kernel oil, which is a cheaper alternative,” she added.
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 of the shipments go to Europe and United States
Earlier, UCAP has lowered its exports targets to about 850,000 MT for 2014, from 1.1 million MT last year because of the massive effects of the typhoon on the coconut industry.
Agustin said that it would take four to five years before typhoon-stricken areas get back in the production stream. Also, recovery of coconut trees affected by biological stress depends on the amount of rainfall in the previous year.