MANILA, Philippines — Local companies are being urged to pursue trade certifications for coconut products to improve the country’s export revenues and get a chunk of the nearly $50 billion international organic food industry.
Control Union, a global network of independent service companies, said trade certifications would create value added income for coconut products.
This as the organic food industry, valued at $49.4 billion, is expected to grow by as much as 40 percent in the next five years amid the countries’ commitment to the Sustainable Development Goals (SDGs).
“Consumption of organic food in the US grew by 6.4 percent and that is 30 to 40 percent increase in consumption in five years. That’s not too far from now. And imagine the increase in demand in terms of volume. And somebody has to supply,” said Sanjaya Pathirage, Control Union regional manager.
Agreement on the SDGs signed by the United Nations’ 193 member-states is one of the major factors that will drive future market growth.
Giant firms like multinational consumer goods company Procter&Gamble, German chemical company BASF, and Cargill have already collaborated on the production of sustainable certified coconut oil in the Philippines and Indonesia.
Companies are involving more than 10,000 farmers into their entire supply chain to help uplift farmers’ lives.
According to a Control Union study, consolidating land into a bigger 500 hectares will significantly cut certification cost down to a minimal $10 per hectare.
A cost-benefit study on virgin coconut oil also showed that certification cost for two hectares will result in a $310 decrease in profit but a consolidated land of 10,000 hectares will generate VCO value of $18.7 million and increased profit of $868,550.
Among profit-increasing certification schemes Filipino companies may comply with are Global Good Agricultural Practice and ISO 22000.
“ISO 22000 is a food safety tool. Organic is increasing value. It helps increase volume of sales profitability and pricing. It helps you build top line. Fair trade USA has now recognized coconut as product within their scheme, and they’re working towards improving it,” Pathirage said.