The Philippine Coconut Authority (PCA) has forecast coconut production this year to drop by 7.66 percent to 2.148 million metric tons (MT) from 2.326 million MT in 2001.
The anticipated shortfall reflects the failend of a five-year production cycle characterized by a progressive decline for two to three years after a bountiful fruiting year. In 1999, production peaked at 2.85 million MT and it’s been downhill since then, but a recovery could still happen this year despite the El Niño weather phenomenon. If a rebound occurs, production, could still go up to 2.4 million MT.
Coconut exports are seen to drop by 5.68 percent to 1.677 million MT from 1.778 million MT in 2001. The CNO export volume for 2003 is forecast to drop by 3.58 percent to 920,000 MT from 954,210 MT in the previous year.
Other exports like desiccated coconut will go down by a hefty 23.47 percent; activated carbon by 9.21 percent and coco chemicals by 9.19 percent. On the other hand, exports of copra will rise by 9.49 percent, copra meal, up by 5.75 percent and coco shell charcoal will inch up by 0.60 percent.
Last year, export earnings from coconut products went down by 5.75 percent to $582.855 million from $618.445 million in 2001. CNO exports in 2002 nose-dived by 14.8 percent to $355.76 million from $417.549 million in the previous year. Export earnings of other coconut products also shrank: copra, down 76 percent; copra meal–31.45 percent and coco shell charcoal –5.85 percent.
In 2002, CNO prices averaged $372.83 per MT but toward the end of the year, prices soared to about $500 per MT.
Despite the downtrend in production and exports, Philippine Coconut Authority (PCA) Administrator Danilo Coronacion said export earnings are expected to go up as prices of CNO will remain strong.
"The tight supply in coconut oil because of the uncertainties in global production is likely to keep prices steady between $530 to $550 per metric ton," said Coronacion, adding he expects prices to remain constant throughout the year.
"Beyond those prices however, we don’t see CNO prices going up further even if production of other vegetable oils are also anticipated to suffer a decline," he added.
The El Niño weather disturbance is likely to trim production of CNO in Latin America while production of other vegetable oils such as canola and soyabean oil will also affect major producers like Canada and the US, while Malaysia, the world’s biggest exporter and producer of palm oil will also see its produce declining.
Despite the anticipated drop in global production of vegetable oils, prices are not seen to improve or soar to unprecedented levels because the market will resist further adjustments, said Coronacion.
"The market will continue to look for coconut oil but the issue of whether or not we can supply the requirements is not a grave concern of big foreign buyers in the early part of the year. One reason is that consumer may not be that strong owing to a slowdown in world economy," added Coronacion.