Seaweed sector faces new set of challenges

CEBU, Philippines - While the global prospects of Carrageenan exports starts to get rosier in the early part of this year, the unrest in the Middle East has given another headache to the industry.

“We are facing another crisis. Uncertainty in the Middle East situation could push into high fuel prices, which add up to the already uncompetitive environment,” said Seaweed Industry Association of the Philippines (SIAP) president Benson U. Dakay.

He said the uncertainty in the Middle East, especially in Libya could largely affect the carrageenan exports in the Philippines, thus the industry is facing various problems now.

Aside from the war in Libya, he said the threat of climate change that affects the supply of raw seaweed is also one of the greatest obstacles to achieve higher growth, and meet the growing demand in the world market.

This year until 2013, the industry is projecting a conservative growth of 10 percent to 15 percent. But, if the Middle East war will continue, Dakay said this will largely affect the growth projection.

In 2010 Dakay said because of the government’s lack of support to farmers, production capacity from Philippine seaweed farms have decreased from producing 150 thousand tons of raw seaweed a year, to 80 thousand tons today.

Because of this, most seaweed processors, and exporters are importing their raw seaweed requirement from Indonesia, because of good quality of their produced.

Calamities, and the different effects of global warming are two of the new factors that weakened the Philippine’s edge in the production raw seaweed.

            This is supposedly, the time that the government should make efforts in providing the farmers with proper technology to sustain the production. “Unfortunately, the government has different priorities now.”

The seaweed business has been started by the Philippines 1977 in both raw seaweed export and processed exportation. Because of its profitability, other countries like Indonesia, and China have copied the technology started by the Philippines, by pirating Filipinos to teach them the rope in seaweed farming and processing.

Dakay described the 1977 to 1995 as “golden years” for the processed seaweed exports. As the Philippines was both the number one exporter of raw and processed seaweed in the world.

“The whole world was eating Philippine-seaweed in those years. Top food makers like Nestle and Mars [chocolates] got their requirement from us,” he stressed.

Today, Dakay said “the Philippines is slowly losing the business. Indonesia has now the pet-food market, which used to be dominated only by the Philippines,” he said.

Nevertheless, Dakay is confident that the Philippines will be able to introduce new applications to processed seaweed or carrageenan.

 Another concern of the industry is the volatility of the foreign exchange in the Philippines. He said the current exchange rate on the other hand is better compared to last year, but stability is important.