A monthly monitoring report of the World Bank (WB) showed that the average price of coconut oil, or CNO, in February fell to a three-month low of $1,252 per metric ton (MT).
The figure was more than a quarter lower than the $1,719-per- MT quotation recorded in February 2017, according to the bank’s monthly Pink Sheet report.
On the other hand, price-monitoring report prepared by the Philippine Coconut Authority (PCA) showed that the average price of coconut oil in the world market has fallen below the $1,200 quotation since the start of March.
In its latest report, the average price of coconut oil as of March 5 was $1,130 per MT, which was 5.04 percent lower than the $1,190 quotation recorded in March 2.
However, United Coconut Association of the Philipines (Ucap) Executive Director Yvonne T.V. Agustin told the BusinessMirror that, while the price of coconut oil is continuously declining, the price of other vegetable oils is sustaining an upward trend. This, she noted, would allow consumers of other vegetable oils to shift to coconut oil due to slimmer price difference, thus, benefitting the local coconut industry.
“The consumers will now have that option to choose coconut oil over other oil products, especially since consumers know the benefits of coconut oil; so that small difference would make a big change for coconut oil,” Agustin said.
In October 2017 the World Bank projected that the annual average price of coconut oil per metric ton will suffer a downward trend from 2018 to 2030.
In its commodities price forecast report, the World Bank noted that coconut-oil price in the world market would fall to below the $1,600-price level this year and would steadily drop to $1,400 per MT by 2030.
As the average price of coconut oil declines in the world market, the price per MT of other vegetable-oil products would increase until 2030, according to the bank’s projections.
Bad raps
As for the bad publicity thrown at CNO by other countries, Agustin said her group is confident that consumers will not be swayed anymore by misleading information on the commodity.
“Consumers now are well-informed on the benefits of CNO. But that is not enough, we need studies and researches, which would formalize the benefits of coconut oil,” she said, “because even the doctors locally are looking for such evidence. They treat the benefits of coconut oil as mere gossips because of the lack of scientific studies.”
Agustin added that the bad raps thrown at CNO paved the way for the scientific and academic endeavor on the real benefits of the product to human health.
Last year the American Heart Association (AHA) released a report indicating that CNO consumption is unhealthy.
Citing several studies, the AHA said in an advisory last June 15 that coconut oil raised LDL cholesterol just like other saturated fats found in butter, beef fat and palm oil. Increase in LDL cholesterol, which is considered bad cholesterol, is a major cause of artery-clogging plaque and cardiovascular diseases, according to the AHA. “Because coconut oil increases LDL cholesterol, a cause of CVD [cardiovascular disease], and has no known offsetting favorable effects, we advise against the use of coconut oil,” the AHA advisory read.
Instead of consuming coconut oil, the AHA urged consumers to replace it with polyunsaturated or monosaturated fat, which “lowers blood triglyceride levels”, an independent biomaker of risk for CVD.
“Replacing saturated with polyunsa-turated fat prevents and regresses atherosclerosis in nonhuman primates.
Overall, evidence supports the conclusion that polyunsaturated fat from vegetable oils [mainly n-6, linoleic acid] reduces CVD somewhat more than monounsaturated fat [mainly oleic acid] when replacing saturated fat,” the advisory read.
“Evidence has accumulated during the past several years that strengthens long-standing AHA recommendations to replace saturated fat with polyunsaturated and monounsaturated fat to lower the incidence of CVD. Reduction in total dietary fat or a goal for total fat intake is not recommended,” it added.
Counterattack
In an interview with the BusinessMirror last year, Philippine Coconut Authority Administrator Romulo J. de la Rosa said members of the Asia Pacific Coconut Community (APCC), including the Philippines, will counter the negative propaganda contained in the AHA’s latest health advisory. The decision was made during a meeting of the 18-member intergovernmental organization in July 2017 in Jakarta, Indonesia.
“We urged the other APCC members that we should jointly face this [bad rap against coconut oil]. There were some suggestions, one of which is that they [APCC members], in their own national efforts, will come up to counter-campaign the study of AHA,” de la Rosa said in an interview. “We all agreed to that, and we also agreed that all APCC member-countries will do further steps to address the bad publicity against coconut oil.”
De la Rosa also said the bad rap against coconut oil had a minimal to less effect, particularly on Americans, due to the consumers’ knowledge and awareness on the benefits of the commodity.
“So far what they [Ucap] are saying is that there has been no big impact on coconut oil, particularly there has been no actual effect in sense of sales. There has been no withdrawal of POs according to members of Ucap,” de la Rosa said.
“There has been no cancellation of orders, then that means our coconut-oil exports have not been affected by the bad propaganda. That’s why we are planning to make a counteroffensive statement because their claims are basically rehashed ones,” de la Rosa added.
The APCC is an intergovernmental organi-zation of 18 coconut-producing states in the Asia-Pacific region, including the Philippines, which aims “to promote, coordinate and harmonize all activities of the coconut industry.” It accounts for over 90 percent of world coconut production and exports of coconut products.
Local production
Agustin puts it simply: higher domestic coconut production leads to higher export volume.
“What the industry really needs is the support of PCA in increasing local production because the requirement for coconut products in the global market is increasing,” she said. “Even if farmers would say that with the increased production the prices of copra would go down. They are not seeing that, yes, it is cheaper, but they can sell a lot, which would offset the difference in the price level.”
Agustin added that there are times when, even if production is high, the prices would also remain favorable to producers. “Just like last year, we had higher production but, at the same time, the prices of coconut abroad were also high, translating into higher local prices.”
The increase in production would also allow the Philippines to open new markets for its coconut product exports, as a majority of volume today goes to the United States and the European Union, according to Agustin.
Agustin said about 10 percent of the country’s total coconut exports annually goes to other countries, such as China, Japan and Malaysia. “We need higher production for us to open new markets.”
Roehlano M. Briones, senior research fellow at state-run Philippine Institute for Development Studies, recommended that the government encourages coconut farmers to do basic tree-maintenance techniques to ensure and improve the nut production of their trees. He added that the PCA should “seriously” consider how to realize other benefits from coconut—aside from coconut oil—in the long run. And for the government to do such, it must restructure the industry geographically, according to Briones. “And for that, we need to geographically restructure the industry. I think the replanting program [of PCA] is a missed opportunity, precisely, to do that.”
“One of the reasons we are unable to exploit in industrial scale the many other benefits from coconut is the high transport costs, because the system is highly fragmented spatially,” he added.
Not so soon
In a 2017 industry projection report, the United States Department of Agriculture Foreign Agricultural Service (USDA-FAS) in Manila said there will be no “dramatic increase” in the number of coconut trees in the country in the next three to five years.
“On a long-term basis, significant increases in copra output are constrained by predominantly old and senile coconut palms or trees, which constitute an estimated 20 percent of overall Philippine coconut trees,” it said.
“According to the PSA, in 2012, there were an estimated 344 million coconut bearing trees. The number of coconut-bearing trees since then has declined to 330 million trees in 2015 [most recent data available],” it added.
The USDA-FAS Manila report noted that, in addition to low productivity and declining number of coconut trees, the perennial visit of devastating typhoons across the country drags the local production down.
Citing data from the PSA, the PCA said coconut trees are planted in 68 provinces, with total hectarage of about 3.517 million, or about 26 percent of the country’s total agricultural land.