MANILA – A lawmaker on Monday called on the Philippine Coconut Authority to boost coconut oil production and marketing as global spot prices of palm oil are seen to go upward.
In a statement, Albay Rep. Joey Salceda said the country's coconut oil could become a viable "substitute good", which could 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.
He said January futures prices of palm oil are already up around 20 percent 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 Niña.
“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," he said.
Coconut farmgate prices are down 10.15 percent year on year, although prices are going up month-on-month.
He noted that copra--or dried coconut kernels from which oil is extracted--prices are relatively cheap, which could be an opportunity to boost the country’s export sales of coconut oil.
“Coconut oil, at CIF (cost, insurance, and freight), is already at USD1,100, while palm oil is at USD1,065. If palm oil prices tick up faster, coconut oil could become a more viable substitute," he said.
Salceda also said palm oil smuggling could be reduced through the use of domestic crude coconut oil, especially as it is cheaper than feed-grade palm oil.
The PCA, he said, could use resources from the Coconut Industry Development Trust Fund or the Coco Levy funds to implement export development and marketing programs to seize this window of opportunity.
“It could be just a six-month window, so time is of the essence here," he said.
The Coconut Farmers and Industry Trust Fund Act, which was signed into law on Feb. 21, 2021, seeks to establish a fund to benefit farmers and develop the coconut industry.
Under the law, PHP75 billion will be allocated to the CFITFA for the next five years while the roadmap will receive PHP5 billion every year.
The fund will directly finance programs and projects for coconut farmers. (PNA)