The Department of Agriculture (DA) said it has temporarily set aside its push for an increase in the coco methyl ester (CME) content of biodiesel, as the government is more focused on easing fuel prices.
Agriculture Secretary Emmanuel F. Piñol said it would be hard to secure support for its call to hike the CME content of biodiesel to 5 percent from the current 2 percent.
“How are we going to introduce a measure that would increase the price of diesel in the face of efforts of the government to bring down the prices of diesel?” Piñol told reporters in an interview last week.
“It is a near-to-impossible request. So, rather than do it and be rejected, we would shelve the idea in the meantime,” he added.
The DA considered increasing the CME content of biodiesel to arrest the steep decline in copra prices. However, economic managers cautioned that increasing CME content would hike pump prices.
Nonetheless, Piñol said the initiative remains as one of the long-term solutions of the government to improve copra prices. “We will not [abandon] it [as] it is a long-term measure [to help farmers].”
In early November, the Philippine Coconut Authority (PCA) board approved a resolution asking President Duterte to direct the National Biofuels Board to increase the CME content of biodiesel.
“This is expected to effectively absorb the huge portion of copra right now in the market, which has resulted in the slump in prices,” Piñol, who chairs the PCA board, said in an earlier interview.
“With these developments, the prices of copra will go up and the local mills we have to contend with competition right now,” he added.
In a separate social-media post, Piñol said at least 12 coconut oil mills have already agreed to purchase copra directly from organized farmers’ groups. The deal was reached on November 22, when Piñol, together with DA and PCA officials, met with owners of coconut oil mills.
“Oil millers said they buy their copra supplies to produce coconut oil from middlemen and traders at the current mill gate price of P22 to P24 per kilo,” he said in a Facebook post last week.
“This is almost double the buying price of copra at farm gate which is between P8 to P12 per kilo,” he added.
Under the agreement, the DA, through the Agricultural Credit Policy Council, would provide coconut farmers groups with a working capital to purchase the produce of their members, according to Piñol.
“This will be delivered directly to the oil mills which will pay the farmers at the price the traders are getting,” he said. “The DA will also provide the farmers’ groups funds for the purchase of hauling trucks and dryers.”
Piñol said the deal would take effect before the end of the month.
Image credits: Bloomberg