Department of Agriculture urged to save coconut industry

Sen. Loren Legarda is urging the Department of Agriculture (DA) and the Philippine Coconut Authority (PCA) to implement remedial measures to address the problems besetting the local coconut industry amid report of huge drop in exports of major coconut products.

Legarda, chairman of the Senate committee on agriculture, was alarmed by latest report of the United Coconut Association of the Philippines (UCAP) showing that the country’s coconut earnings as of Jan. 28 dropped by 88 percent to $18.81 million from $152.24 million during the same period last year, while volume dipped by 81 percent to 39,714 metric tons (MT) from 212,378 MT in the same comparative periods.

Specifically, UCAP report shows that coconut oil exports were down by 79 percent to 25,020 MT from 121,766 MT compared to a year ago record. Coconut oil accounts for 63 percent of total coconut products shipments. Copra meal shipments dropped by 70 percent to 10,750 MT from 36,031 MT.

According to the report, there was a decline in demand from foreign buyers, especially those affected by the global economic crisis. It was also attributed to lower demand from buyers, partly due to the increasing popularity of palm kernel oil, which is much cheaper than coconut oil. Current price of kernel oil is $515 per MT, while coconut oil is pegged at $670 per MT. 

“There is an urgent need to implement remedial measures to address the current plight of some 3.5 million coconut farmers and around 25 million Filipinos who are directly or indirectly dependent on the industry,” the senator said.

“One immediate solution that I recommend, while there is low demand for coconut products in the world market, is to assist coconut farmers in planting and propagating high-value crops suitable to cultivate in idle lands within the coconut plantation,” Legarda said.

“Another remedy, which is a long term and maybe sustainable, is to encourage more investment in the production of coco-biodiesel, particularly Coconut Methyl Ester or CME which is derived from coconut oil,” the senator suggested.

Legarda said that she was happy with the news report that oil companies and motorists have started to brace for the higher blend of CME to diesel products now sold at the pumps.

According to the report, the two percent CME blend forms the second phase of the government’s bio-fuels program as prescribed under the Bio-fuels Law of 2006. This is said to be in conjunction with the kick-off of the mandatory sale of ethanol-blended gasoline by the oil firms.