El Niño to slash coconut oil exports

MANILA, Philippines — The El Niño phenomenon is seen pulling down the country’s coconut oil exports by a fifth in market year 2024-2025 to 900,000 metric tons (MT), according to an international agency.

The United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila) said drier weather conditions would affect coconut flower growth, resulting in reduced coconut output.

The lower coconut output would mean decreased supply of copra used in coconut oil production, thereby affecting the country’s exports of the prized commodity.

The USDA-FAS Manila said the impact of El Niño would be felt in the market year 2024-2025, which begins in October, since coconut production takes about a year.

Based on its estimates, the Philippines’ coconut oil exports in market year 2024-2025 would decline by 21 percent to 900,000 MT from the 1.14 million MT projected volume in the current market year 2023-2024.

Citing the Philippine Coconut Authority, the international agency said the effect of El Niño would be seen “13 months after the conclusion of the drought.”

The USDA-FAS Manila said there are about 46 coconut-producing provinces affected by El Niño as of end-February, based on government and industry data.

According to the USDA-FAS Manila, a total of 62 oil mills with a total milling capacity of 3.685 million MT in 10 regions nationwide are affected by the weather disturbance.

“Coconut areas affected by dry conditions, dry spell and drought will result in low coconut production, which will affect coconut supply to oil mills located in these areas,” it said in a report published yesterday.

Industry stakeholders estimate that about 80 percent of copra produced in the country is crushed for coconut oil production, the USDA-FAS Manila said.

The USDA-FAS Manila projected that the country’s coconut oil production would decline by 15 percent year-on-year to 1.57 million MT from 1.85 million MT.

Copra production is pegged at 2.5 million MT, down by 15 percent from 2.94 million MT, according to the USDA-FAS Manila.

Aside from El Niño, the USDA-FAS Manila emphasized that “stringent” European Union (EU) rules would also contribute to the decrease in the country’s coconut oil exports.

Local oil millers would “initially struggle” in complying with the EU’s requirement of having lower mineral oil saturated hydrocarbons (MOSH) and mineral aromatic hydrocarbons (MOAH) for coconut oil being exported to Europe, the international agency said.

The USDA-FAS Manila explained that the current practice of drying copra still involves smoking that increases the MOSH and MOAH contamination in coconut oil.

The Philippines is the world’s top producer and exporter of coconut oil.