Prices of crude coconut oil (CNO) in the world market have fallen sharply by more than 40 percent as the commodity suffers from a supply glut, with the Philippines expected to be deeply affected as the world’s top exporter of coconut oil.
According to the Philippine Coconut Authority (PCA), CNO prices hit a 16-month low of $1,100 a ton last week from a high of $1,850.
While it has not yet reached a “crisis level,” PCA Administrator Romulo J. de la Rosa said the government must act fast before copra and CNO prices further plummet to the detriment of the country’s coconut industry.
To boost domestic use of coconut oil, De la Rosa has urged the National Biofuels Board (NBB) to raise the coco methyl ester (CME) content of local biodiesel to 5 percent from 2 percent.
Under the government’s Philippine Energy Plan 2012-2030, Philippine diesel should contain at least 5 percent CME by 2020 or before the end of President Duterte’s term.
“The increase could effectively support our coconut farmers and farm workers whose livelihood are threatened by the declining prices of crude coconut oil in the international market,” De la Rosa said.
“The higher CME content in our biodiesel could significantly increase the demand for copra and CNO, making their prices more buoyant,” he added.
De la Rosa explained that the increase in the CME content of biodiesel could be done on a staggered basis to give oil industry players enough time to secure their needed CME supplies and recalibrate their blending ratios.
“The first increase can be from 2 percent to 3 percent starting Aug. 1 this year,” he said. “This means that the biodiesel to be sold in the domestic market should have 3 percent CME and 97 percent regular diesel starting Aug. 1.”