PHILIPPINE coconut oil exports are expected to decrease in the first six months of the year due to low production caused by typhoons that hit major coconut producing areas last year.
Citing preliminary industry data, United Coconut Association of the Philippines (UCAP) executive director Yvonne Agustin forecasts that coconut oil (CNO) exports will be down to 174,210 metric tons (MT) or by 54.1 percent in January to June 2014, from 379,470 MT in the same period last year.
In March 2014 alone, Agustin said, CNO exports were pegged at 59,950 MT, down by 61.9 percent from 157,170 MT in 2013.
She attributed the declining CNO exports to the tight supply of raw materials such as dried coconut meat or copra in the domestic market after two years of successive good production, which stressed coconut trees.
The damage to coconut-producing areas brought about by super typhoon “Yolanda” in November 2013 also slowed the supply and delivery of copra to mills nationwide, she added.
“It’s a double whammy for the industry,” Agustin said in a telephone interview with agriculture reporters.
However, in terms of prices in the international market, she said, CNO exporters continue to enjoy premium at US$1,389 per MT, compared to its competitor palm kernel oil at US$1,378 per MT.
In February this year, CNO was pegged at US$1,350 per MT while palm kernel oil prices averaged US$1,281 per MT.
“It’s a good thing that prices of palm kernel oil was able to catch up faster in March. A wider gap in the prices may result to buyers shifting to palm kernel oil, which is a cheaper alternative,” said Agustin.
Coconut oil, which is used in food, cosmetics, and energy-related products, among others, 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.
Earlier, UCAP has lowered its exports targets to about 850,000 MT for 2014, from 1.1 million MT last year because of massive effect of the typhoon to the coconut industry.
The Philippine Coconut Authority (PCA) said that over 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 nationwide.
Agustin said it would take 4-5 years before typhoon-stricken areas recover and be back in the production stream. PNA