10% hike in abaca production seen this year

MANILA, Philippines - The Fiber Industry Development Authority (FIDA) is projecting a 10 percent growth in abaca fiber production this year and a corresponding 15 percent growth in abaca export earnings.

The Philippines is the world’s biggest supplier of abaca, accounting for 86 percent of the world’s supply, with Ecuador supplying the remaining 14 percent.

According to Mystic T. Pelayo, officer-in-charge of FIDA’s planning and statistic Division, demand for abaca has begun to recover, after suffering a dip in 2009.

Abaca production in 2010 increased to 57,215 metric tons after dipping to 54,584 MT in 2009 from a high of 77,389 MT in 2008.

Correspondingly, abaca export earnings in 2010 amounted to $104.525 million from the $68.509 million earned in 2009, which had dropped from the $99.463 million earned in 2008.

 Thus, based on the projected 15 percent growth in abaca export earnings, the Philippines could roughly earn up to an additional P5 billion.

 Pelayo said 2008 was a good year for abaca production with prices reaching a high of P60 per kilo for regular quality abaca and as high as P90/kilo for high quality abaca.

 Unfortunately, in 2009, the global economy experienced a recession, resulting in lower demand for abaca is used not only for rope and textile applications, but also for food applications such as teabags and sausage casings.

Demand is beginning to pick up, particularly for abaca pulp and cordage, Pelayo said, adding that the farmgate price at present is P45/kilo for regular quality abaca.

FIDA Administrator Cecilia Gloria J. Soriano noted however that farmers are still not encouraged enough to increase their production, hoping for a further increase in prices.

The problem, according to Soriano and Pelayo is that if the price of abaca rises to a high of P60/kilo for regular quality and P90/kilo for high quality, it becomes less competitive against cheaper fibers like sisal and kenaf which are priced about 40 percent lower.

 Abaca fiber (also known as Manila hemp) has been proven to be more tough that jute, sisal and kenaf, Soriano said.

The biggest export market for abaca fiber is the United Kingdom, followed by Japan and China where demand is increasing as it is beginning to use more teabags for the modern consumers.