Working on a nutty comeback
WILL Mexico, which currently has a minuscule coconut production, catch up fast enough to compete with world leaders like the Philippines and Indonesia? The Mexican government thinks that, by putting programs and resources in place, it can be a contender.
Mexico’s main challenge is to address the development of small producers, which are usually family business and small landowners who don’t have the economic and technological resources, as well as the knowledge to make the most of their lands.
According to the Sagarpa (Mexican Ministry of Agriculture), the coconut-production chain represents for Mexico a commercial opportunity of $160 million. Among coconut products, water is the one with the greatest increase, with an average annual growth of 70 percent between 2009 and 2016.
The net production of coconut in the country amounts to 221,000 tons, according to figures from the Ministry of Agriculture, which in the last two years had announced several investments to boost palm farming of coconut in Mexico in the key coconut-producing states.
Mexican producers need not look too far for the international prospects of coconut: In neighboring United States the coconut-water industry is a growing billion-dollar market.
Sagarpa has provided incentives for investment projects in infrastructure and equipment to revive coconut production. They have put in place the Strategic Program to Boost the Coconut Value Chain in the 12 states located in the tropical coasts of Mexico.
In 2014 the first “Agro -Cluster” of coconut was built in the state of Guerrero. It currently benefits 2,500 producers and hosts 12 companies and civil associations. The program does not only benefit coconut producers, but also includes cultivators of cocoa, rubber, pepper, pineapple, palm oil, coffee, nuts, stevia, vanilla, mangosteen and amaranth from the states of Guerrero, Chiapas, Oaxaca, Veracruz and Puebla. This cluster is now growing better quality and coconut plants more resistant to pests. It is working to boost productivity and yield.
In May 2017 the first National Coco Forum in Mexico brought together industry leaders, including international packaging, production and nutrition specialists, to capitalize on international business opportunities for Mexican coconut.
The Mexican private sector is also supporting this program. Companies, such as Coco Colima, are providing technology and know-how to producers, to grow resistant and more productive plants, and cultivate organic products without pesticides.
Currently, Mexico is the 11th-largest world producer of coconut palm. But it seems the country can take advantage of the fact that Asian plantations are aging and facing a variety of problems that the Mexican industry also faced in the past.
Mexico: Opportunities and threats for PHL coconut
ACCORDING to the Philippine Coconut Authority (PCA), the Philippines has a cultivated area of 3.5 million hectares, with almost 330 million coconut-bearing trees, or an average of 45 nuts per tree with a three-year yield. For the last 15 years, copra production has averaged 2.5 million tons, and exports have fluctuated between 1.5 million tons and 2.3 million tons. Current priorities for the PCA include rehabilitation and redevelopment of coconut lands lost to Supertyphoon Yolanda.
Mexico’s copra production, according to Sagarpa, was around 209,000 tons from 2013 to 2016 with an average growth rate of only 2.2 percent.
Mexico does not have a specialized government agency for the coconut sector like the PCA. The government is implementing a program of land recovery and industry development, but it will take time. More research needs to be done, more technology needs to be introduced, while the sector awaits the effects of the tax incentives the government is proposing to make small lands profitable for coconut cultivation.
While the Mexican government and industry are working to revive its coconut industry, Mexico will continue to import coconut products, to supply its domestic market. At the supermarket, the Mexican consumer can find coconut products coming from different countries, mainly from Mexico, the US and Korea. Some of these products are made with Philippine coconut, like the US brand “Nutiva”, which exports its coconut butter with Philippine ingredients to Mexico.
The Department of Trade and Industry´s Philippine Trade and Investment Center in Mexico City (DTI-PTIC) has been working to activate new Mexican buyers and importers of Philippine coconut products. PTIC Mexico organized a delegation of Mexican buyers to the last International Food Exhibition (Ifex) in Manila in May and has so far received very positive response as the buyers establish regular business with Philippine companies.
One such Mexican buyer now plans to regularly import each month five to six forty-foot containers of Philippine coconut. The buyer shared with PTIC his insight that the next four to five years will provide a good window of opportunity for the Philippines to export coconut products to Mexico.
What should give Philippine policy-makers and coconut industry players more pause for reflection are the efforts that Mexico is currently doing to invest and incentivize the redevelopment of its coconut industry.
Although Mexico is a million tons away from reaching Philippine production levels, that country has the ingredients of growing its coconut industry to rival that of the Philippines. Its huge swatches of territory with climate ideal to coconut production is its key advantage. If it successfully redevelops its coconut industry, its geographic proximity to the US and Canada will make Mexico an ideal supplier to the North American market in the future.
Philippine government authorities and private-sector coconut producers must take a long-term view of sustaining and growing the country’s market share in the global-coconut industry against such competitive threats. The government, together with the entire coconut-industry supply chain, should continue to increase agricultural lands planted to coconuts, and improve productivity and product innovation, to keep the country’s position in the global market intact.
Vichael Angelo D. Roaring is a Trade Service Officer of the Department of Trade and Industry’s Foreign Trade Service Corps. He is currently assigned as commercial counsellor at the PTIC attached to the Philippine Embassy in Mexico. PTIC Mexico is the DTI’s frontline office in promoting Philippine exports and investments in Latin America.