October 24th, 2022
House Ways and Means Chair Joey Sarte Salceda (Albay, 2nd district) called on the Philippine Coconut Authority to “seize on the opportunity” to boost coconut oil production and marketing as global spot prices of palm oil are seen to go upward.
Salceda, who also sits as Vice Chair of the House Committee on Agriculture and Food, says that as palm oil prices rise, the country’s coconut oil could become a viable “substitute good,” and could thus see increased demand globally, if marketed well.
“Coconut is the country’s top agri export. We are the world’s best in coconut production. So this is a super crop for us. And the opportunity is presenting itself,” Salceda said.
January futures prices of palm oil are already up around 20% this month, while the typical drop in output during the rainy season is expected to be even sharper in Malaysia and Indonesia this year due to La Nina. Inventories in Indonesia are also down, to 4.04 million tons by the end of August, compared to 5.91 million tons a month earlier and 6.69 million tons at end-June, according to estimates by the Indonesian Palm Oil Association (GAPKI).
“Coconut oil is a substitute especially for feed additives. So, there is an opportunity to boost our export sales from coconut oil, if we can market this right.”
Coconut farmgate prices are down 10.15% year on year, although prices are going up month-on-month.
Salceda says relatively-cheap copra prices are an opportunity to boost the country’s export sales of coconut oil.
“Coconut oil, at CIF, is already at USD 1,100.00, while palm oil is at 1,065. If palm oil prices tick up faster, coconut oil could become a more viable substitute.”
Salceda also sees an opportunity to “reduce palm oil smuggling through the use of domestic crude coconut oil, especially as it is now, by some accounts, cheaper than feed-grade palm oil.”
“So, I am calling on the Philippine Coconut Authority to find ways to market Philippine coconut oil as a viable alternative to palm oil as futures prices continue to rise, and to help our coconut farmers get into the export trade, or at least benefit from it.”
“The first step is for the PCA to use whatever resources can be sourced from the Coconut Industry Development Trust Fund, or the Coco Levy funds, to implement export development and marketing programs to seize on this window of opportunity.”
“It could be just a six-month window, so time is of the essence here.”