Philippines coconut oil shipments to decline in 2019

MANILA, Philippines — The export of coconut oil, the country’s top agricultural export, is expected to decrease this year due to an oversupply of global palm oil coupled with the decline in local copra production.

In the latest report of the United States Department of Agriculture-Foreign Agricultural Service (USDA-FAS), it said coconut oil exports may decline to 950,000 metric tons (MT) as output is seen decreasing three percent to 1.66 million MT from the 1.71 million MT recorded in 2018.

This as copra production will continue to decline to 2.5 million MT from the 2.63 million MT last year.

“Overall domestic coconut oil consumption, however, is expected to increase to 710,000 MT due to subdued coconut oil prices as a result of a global vegetable oil glut,” USDA said.

Furthermore, exports of copra meal, a by-product of the coconut oil extraction process, will remain flat at 350,000 MT this year with Korea and Vietnam still the top export destinations.

Copra meal output is forecast to slightly decrease to 870,000 MT from 900,000 MT due to the decline in copra supply.

“On a long-term basis, copra productivity is constrained by predominantly old and less productive coconut palms, which constitute an estimated 20 percent of overall Philippine coconut trees,” USDA said.

Data showed that coconuts may be found roughly 70 of the country’s over 80 provinces, and cover around a quarter of agricultural land.

Domestic copra prices have been subdued for most of 2018 due to an oil glut in the international oil market.

Copra prices in November dropped to around P15 per kilogram from over P40 per kilo, according to the Department of Agriculture.

In response, the DA recently met with local oil millers belonging to the Coconut Industry Investment Fund Oil Mills Group to discuss raising their copra buying mill-gate price.

The millers have agreed to set the minimum copra buying price at P20 per kilo.