Coconut industry in serious troublegreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
Business News Coconut industry in serious trouble by :Rocel C. Felix 10/6/00 The local coconut industry is in crisis with the glut in the world market depressing coconut oil and copra prices to their lowest levels in 15 years.
PCA Administrator Eduardo Escueta admitted the industry is currently experiencing a "temporary crisis of sorts" as the excess supply of coconut oil in the world market has resulted in depressed copra prices in the country .
Data released by the PCA show that for the first half of the year, coconut oil prices in the world market dropped 25 percent to 25.39 US cents per pound from 33.85 cents during the same period last year; copra meal prices are down 20.49 percent to $50.73 per metric tons from $63.81; desiccated coconut, down by 9.39 percent to 48.79 cents per pound from 53.84 cents; while activated carbon is down 3.88 percent to $996.29 per metric ton.
On a per metric ton basis, coconut oil is now averaging just $300 per metric ton compared to last years all-time high of $900 per metric ton while copra was pegged at P21 per kilo in 1999.
Currently, Escueta said, farmgate prices of copra are pegged at P6 to P8 per kilo while millgate prices are at P10 per kilo. He said at these prices, farmers are not making money anymore.
He said local prices of copra and coconut oil are influenced by the world market, just like world crude prices affect local prices of gasoline and diesel.
Escueta explained that while last year was a good year in terms of copra prices, it was a bad year in terms of coconut production because of the adverse effects of El Niqo.
As a result, world buyers of Philippine coconut, fearing production would get worse in 2000, contracted palm oil supplier from Malaysia and Indonesia on a long-term basis.
Escueta hinted coconut oil and copra prices could fall further since the buyers requirements are fully covered until the first quarter of 2001.
Only then do they expect prices of these two commodities to improve.
"Once the high inventory of palm oil in the storage tanks of world buyers is depleted, we expect the prices of coconut oil and copra to increase," Escueta said.
The PCA is also projecting coconut production in copra terms this year to reach 2.2 million metric tons compared to last years 1.35 million metric tons. Projected production for next year is 2.4 million MT.
Escueta said, however, that production will depend on the weather, adding that if El Niqo recurs, production could be adversely affected again
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