The country’s coconut oil exports in the first quarter of the year fell by 39.2 percent to $383 million from $630 million last year as world prices continued to decline due to supply glut.
The slump in prices is expected to continue, said United Coconut Association Philippines’ (UCAP) president Dean Lao, as coconut oil prices reach $1,029 a ton from last year’s average of $1,610 a ton.
“This will continue because nothing is stopping it from falling,” said Lao. “While a crisis level is relative, we think we have already reached it since farmers are already losing so much.”
Since domestic prices of coconut oil are highly dependent on the world market, the farmgate price of copra – or the kernel from which coconut oil is extracted – is also significantly affected.
Based on the Philippine Coconut Authority’s (PCA) daily price watch, the farmgate price of copra had reached a low of P20.54 a kilo. Mill-gate price, on the other hand, has declined to an average of P25 a kilo from P48.75 a kilo a year ago.
To boost domestic demand and, in the process, stabilize local prices of coconut products, industry stakeholders are pushing for higher coco methyl ester (CME) content in biodiesel blend.
PCA has been urging the National Biofuels Board (NBB) to raise the CME content of local biodiesel to 5 percent from 2 percent starting this August, as mandated by the government’s Philippine Energy Plan.
With the current international prices, PCA Administrator Billy Dela Rosa is anticipating a decline in the country’s revenue from coconut oil exports by at least a fifth to $1.2 billion.