Coconut oil export recovery seen in H2

The coconut oil industry expects to start recovering in the second half of 2011 but full-year exports of coconut oil would likely be lower than that in 2010, an official of the United Coconut Association of the Philippines (UCAP) said over the weekend.

Coconut oil exports reached a little over $1 billion in 2010, according to estimates by UCAP.

UCAP executive director Yvonne Agustin said in a phone interview that record shipments in the January-June period of 2010 are hard to match, but added that the levels started to decline in the latter part of that year.

In other words, the volumes chalked up in the July-December period of 2010 would be easier to match, unless this year’s production gets worse.

Biological and weather-induced stresses, mostly due to lingering effects of last year’s extended drought on coconut trees, affected production this year.

Industry experts have said that drought stress can be felt until about a year after the actual onset of the phenomenon.

The latest monthly estimate from UCAP showed that exports of coconut oil—one of the Philippines’ top dollar earners—fell by 59.6 percent to 52,948 metric tons in May 2011 from 130,921 tons in May 2010.

Agustin said that high coconut oil prices may cushion exporters from the impact of having less of it to ship.

Overall, prices of commodities, including coconut oil, have held up due to robust global demand.

Before 2010, the last time coconut oil exports breached $1 billion was in 2008. Coconut exports first hit the $1-billion level in 1979.

According to UCAP, 2010 production was about the same as 2009 but improved global demand and prices helped make the coconut industry an “overachiever” in 2010. Coconut oil exports in 2009 reached only $588 million, but improved prices pushed the value up last year.

The primary markets for Philippine coconut oil, which is used in food, cosmetics and energy-related products, are still the United States and Europe, according to UCAP data.

The Philippines, which ships out about 80 percent of its production, is the world’s biggest exporter of coconut oil.

Coconut products are still among the top agricultural earners of the country. More than 20 million Filipinos depend on the planting and harvesting of coconuts.