As copra prices slide, DA seeks ban on palm oil imports

The Department of Agriculture has renewed its call to ban the entry of imported palm oil from Malaysia and Indonesia into the country as local coconut farmers reel from “extremely low prices” of copra.

Imported palm oil competes directly against local coconut oil as they are both used in the manufacturing of cooking oil.

In a Facebook post, Agriculture Secretary Emmanuel Piñol said palm oil imports from the two Southeast Asian countries spiked by 10 fold over the last three years, eating up the market share of local farmers.

He said the recommendation to ban the importation of palm oil was as early as last year to the administration’s economic cluster following reports that the European Union had imposed a ban on palm oil from Malaysia and Indonesia over “environmental issues.” The government, however, has yet to act on the recommendation.

With fewer markets to penetrate, Piñol said “this development is expected to result in the dumping of palm oil into countries like the Philippines,” where palm oil imports are tariff-free.

The DA has also appealed to the World Trade Organization (WTO) to allow the country to enforce a cap on palm oil imports if a ban could not be enforced.

Piñol said he had already instructed the agency’s WTO negotiators to draft an order which would impose a tariff on palm oil imports, but he did not disclose how high the rate would be.

In 2017, palm oil that entered the Philippines from Malaysia and Indonesia reached 200 million kilograms.

This has affected both local palm oil and copra farmers given the stiffer competition.

While the Philippine Coconut Authority does not monitor domestic prices of palm oil, it reported that the farm-gate price of copra had slid by 36 percent to P14.34 a kilo from P22.47 a kilo last year.