The governments of the Philippines, Malaysia and Indonesia have agreed to create a tripartite technical working group (TWG) to address the dumping of palm oil into the Philippine market, Agriculture Secretary Emmanuel Piñol said.
Piñol shared on his Facebook page that an agreement was reached by the three governments on Wednesday. This will pave the way for the creation of a TWG next week.
TWG, he said, would ensure that the volume of palm oil shipped to the Philippines from the two Southeast Asian countries would not hurt the local coconut and palm oil industry.
This develops as local prices of copra continue to fall despite government interventions to raise its farm-gate price. Imported palm oil competes directly against local coconut oil as they are both used in the manufacturing of cooking oil.
“Since palm oil is cheaper than coconut oil, the increase in palm oil exports was cited as one of the reasons behind the collapse of copra prices,” the secretary said.
“During the meeting, it was agreed on that the TWG will draft recommendations on the rationalization of palm oil exports to the Philippines,” he added.
Some of the recommendations from the Department of Agriculture (DA) are the monitoring by Malaysia and Indonesia of reports of smuggling of crude and refined palm oil into the Philippines and for the two countries to open up their markets to Philippine coconut-based products “to correct the trade imbalance.”
The DA’s earlier call to ban the importation of palm oil was not included.
According to Piñol, Indonesia’s exports to the Philippines reach $1 billion yearly, while that of the Philippines amounts to only $400 million yearly because of Indonesia’s “restrictive policies.”
Importation data gathered by the agency also showed that exports of palm oil to the Philippines from Malaysia and Indonesia had increased by 100 percent over the last three years.
Earlier this week, the average farm-gate price of copra was P14.09 a kilogram, down 39 percent from P19.59 a kilo in the same period last year.
The Philippine Coconut Authority said the farm-gate price of copra should not be lower than P15 a kilo for farmers to survive. —KARL R. OCAMPO