Abaca shortage pulling up price

MANILA, Philippines - The Philippines is currently experiencing a scarcity of abaca resulting to an almost 50 percent surge in market price, the Department of Agriculture (DA) said.

Agriculture Secretary Emmanuel Piñol said reports from paper manufacturing companies showed that buying price of the world’s strongest natural fiber spiked 48 percent to P90 per kilo.

“Abaca is in short supply and the buying price has shot up,” he said.

Data showed that price benchmark for abaca fiber in previous years was $1 to $1.50 per kilo, which at today’s exchange rate should be P46 to P70 per kilo only.

Philippine Fiber Industry Development Authority (PhilFIDA) executive director Victor Prodigo said the price of abaca has gone up to P75 per kilo and that demand for this commodity continued to go up.

There are only three countries producing abaca: the Philippines, which is the original producer; Ecuador, and Costa Rica.

Abaca fiber production is currently placed at only 60,000 tons per year compared to the 80,000 tons five years ago, with quality going down due to a mix of high and low grade abaca.

With the current situation, paper manufacturers are being forced to change their manufacturing processes to use less and less abaca, by switching to synthetic or man-made fibers and to other natural fibers.

Piñol sought an increase in abaca hectarage and the organization of abaca farmers into cooperatives that will set up their own general baling establishments (GBEs).

He also urged farmers to sell directly to the abaca processors, bypassing and keeping for themselves the margins of the middle traders.

“These initiatives will have a gestation period of at least three years and by that time, the downtrend in the world market demand for abaca fibers might already be a reality,” he said.