PH to export less coconut oil this year
Philippines, the world’s top coconut oil (CNO) exporter, will see a decline in the exports of coconut oil (CNO) to 950,000 tons due to an oversupply of global palm oil as well as a predicted decline in copra production.
A data from the US Department of Agriculture (USDA) showed that Philippines’ CNO output in Market Year (MY) 2019 to 2020 is expected to contract further to 1.66 million tons, consistent with the projected decrease in copra production during the year.
CNO is the preferred oil, as long as prices remain stable. It is used as a raw material in making margarine, shortening, and milk fat substitutes and in biscuit and cracker production.
“CNO food use consumption is expected to be flat in MY19/20, as overall CNO output is likely to decline from the previous year’s level. This coincides with the expected further softening of palm oil prices as a result of a recent European Union (EU) ruling (see OILS, Trade). The narrowing price differential resulted in increased CNO competitiveness,” USDA said.
The United Coconut Association of the Philippines (UCAP) estimates coconut output in calendar year (CY) 2018 at 2.61 million tons, increasing marginally to 2.63 million tons in 2019. Copra output in October to September market year (MY) 18/19 was adjusted downwards as a result.
Industry notes that two years of increasing nut-bearing is usually followed by declining output and that coconut trees are likely on the verge of stress.
“This ‘rest’ period combined with dryness in coconut growing areas in early 2019 as a result of an El Niño weather disturbance are likely to result in a five percent decline (to 2.5 million tons) in MY 19/20 copra production compared to the previous year’s level,” USDA said.