Government to work out countertrade deal with Chin

The government will work out a counter-trade arrangement with China. The plan is to exchange Philippine coconut oil and copra with Chinese farm machineries, especially those needed in coconut farms.

This was disclosed Friday by Administrator Danilo Coronacion of the Philippine Coconut Authority during the celebration of the 15th National Coconut Week at the Bureau of Soils convention hall in Quezon City. Coronacion said the countertrade proposal will officially be presented by former President Ramos, now Ambassador at large, this coming Sunday in Beijing.

Coronacion said the drought in China has severely affected its copra output such that it now has to get its supplies from markets like the Philippines.

There was a surge in copra prices in June – from a depressed rate of P2 to P3 a kilo in February and March to P8 to P9 a kilo – and this was explained by the huge requirement of China.

China currently sources its edible oil requirement from soybean oil and copra (coconut oil), but with the uncertain policy of China over genetically modified soybean, it now turns completely to coconut oil, which, however, is more expensive than palm oil, Coronacion said.

Coronacion said the countertrade will be presented by Ramos when he addresses the business meeting in Beijing and would most likely meet with top agricultural officials of China.

He said the total shipment to China this year stood at $10 million, mostly exported last June, which caused the rebound of the sector from a year-long depressed state.

In addition, the government will push for the mandatory five percent displacement of diesel fuel with coco-diesel to ensure the sustained viability of the industry.

But unlike the previous coco-diesel replacement program of 1976 (which utilized crude coconut), the planned mandatory replacement program will utilize coco methyl ester, a higher grade considered a bio-diesel and is used in the United States. He said gasoline stations in the States now have pumps (called enviro-diesel that use biodegradable coconut for fuel).

At five percent replacement, this would ensure a ready market of some 600,000 tons a year for coconut, or almost a third of the country’s production, Coronacion said.

And with the lapse of the temporary restraining order against surfactants (used in soaps), the PCA can now push anew for the use of coco fatty acids surfactants for this specific market.