The Department of Agriculture (DA) will hold a dialogue with farmers and traders to determine strategies that will enable them to cope with the continuous decline in the price of copra.
Agriculture Secretary Emmanuel F. Piñol said he would meet with the owners of copra trading companies and coconut oil mills next week. This after some coconut farmers stopped harvesting their crops due to low prices.
“The meeting is intended to identify immediate measures which could be adopted to address the very low price of copra,” Piñol said in a recent Facebook post.
“From a high of over P40 per kilograms a few years back, copra prices have plummeted to as low as P15 per kg today, prompting some coconut farmers to stop harvesting their crops,” he added.
Piñol said he would discuss with stakeholders the reported smuggling of copra and palm oil in the southern parts of the country that have resulted in the “slump” in the prices of coconut oil and palm oil.
“The coconut industry is virtually in the throes of death with the price of copra in the world market falling to very low levels where coconut farmers could barely survive, a dangerous situation for a sector where poverty incidence is one of the highest,” he said.
The continuous decline in the domestic prices of copra was attributed to falling world prices of coconut oil (CNO) due to the vegetable oil glut.
Earlier, preliminary data from the United Coconut Association of the Philippines Inc. (Ucap) showed that the country’s CNO exports in the first half fell by 11.10 percent to 414,089 metric tons, from 465,084 MT, due to lower shipments in the first quarter.
Ucap data also indicated that the country’s CNO exports in the first quarter declined by 31.05 percent to 206,043 MT, from 298,838 MT recorded in the January-to-March period of 2017.
Despite the double-digit contraction in the January-to-June shipments, Ucap is optimistic that the country can hit its full-year export target of about 1 million metric tons (MMT), according to Ucap Executive Director Yvonne T.V. Agustin.
“We are still hopeful that [shipments] would hit almost 1 million [metric tons]. In the first semester we already exported over 400,000 MT, so doubling it would easily reach 800,000 MT,” Agustin said.
“And the demand for CNO in the second half is usually higher compared to the first half,” she added.
Ucap projected that domestic coconut output this year would grow 8.67 percent to 2.607 MMT in copra terms, from 2.4 MMT recorded last year.
Agustin said Ucap is hopeful higher CNO shipments would offset the decline in the international price of vegetable oil and allow export receipts to hit $1 billion.
“For example, our volume of exports in the last three months has been steadily increasing. But revenue is affected by the low prices [of CNO],” she said.
A “great performance in terms of production and export” could offset, she said, the decline in revenue. “Last year we earned around $1.4 billion, so we hope to reach that due to higher shipment.”
The global price of CNO depends on the prices of other fats, such as palm oil, which accounts for the bulk of the global vegetable oil market, according to Agustin.
Image credits: Bloomberg News