By Madelaine M. Miraflor
A group of coconut farmers, coco oil producers and the business sector has filed an appeal addressed to President Rodrigo Duterte to increase the biodiesel blend as part of efforts to arrest declining copra prices.
In particular, they are urging the government to immediately implement the Biofuels Act of 2006 (Republic Act 9367) mandating that all diesel fuels sold in the domestic market be blended with five percent Coco Methyl Ester (CME).
The production of the 5 percent Biodiesel Blend, known in industry circles as B5, can help address the problem of plummeting copra prices.
“Increasing the current biodiesel blend to 5 percent as mandated by law will increase domestic crude coconut oil (CNO) utilization and thereby contribute greatly in the stabilization of domestic copra prices,” the group said in a resolution.
Biodiesel is a blend of diesel fuel and coconut methyl ester, a derivative of coconut oil.
As of now, the very low prices of copra is adversely affecting the livelihood of 3.5 million coconut farmers and their families as well as the coconut-based export sector.
The resolution was issued after a roundtable discussion attended by the various stakeholders of the coconut industry.
It was initiated by the Philippine Coconut Authority (PCA).
Romulo J. de la Rosa, PCA Administrator, quoting industry experts, said that the increase in the demand for coconut oil brought about by the move to B5 could push copra prices to the vicinity of P30 per kilo which, in turn will translate to about P22 per kilo at the farmgate.
The current price of about P13 in the remote areas is below the break-even copra production price of P15 per kilo.
De la Rosa said that the price of copra has declined because of a glut in supply in the world market of vegetable oils as well as speculative behavior by global traders reacting to announcements by the European Union (EU) that they will ban the use of palm oil in their biofuels program.
“The country’s coconut industry is highly dependent on foreign markets. Increasing substantially the domestic demand of coco products can help wean the industry from the caprices of the global vegetable oils market,” he said.
De la Rosa is also now pushing for more integrated coconut-based manufacturing plants which can turn out a variety of products such as bottled coconut water, coconut milk, desiccated coconut, virgin coconut oil and coconut flour from whole nuts.
But as an urgent measure, the PCA, together with farmers and industry players, are calling for the immediate implementation of the biofuels law.
Quoting a study done by the Asian Institute of Petroleum Studies, Inc. (AIPSI), de la Rosa explained that the biofuels industry would need at least 360 million liters of CME per year if it were to implement the 5 percent Biodiesel Blend.
To produce this amount of CME, some 489.8 million kilos of copra are needed.