By Madelaine B. Miraflor
The entire coconut industry shouldn’t suffer just because the price of copra, a major coconut by-product used in coconut oil manufacturing, has been on a downtrend, according to a think tank.
The Philippines should just simply start developing other coco-based products, a report released by the University of Asia & the Pacific (UA&P) said. While the coconut industry has been dominated by traditional coconut products, particularly by coconut oil and copra, there has already been a 10 percent decline in its share of total coconut exports, it added.
This, while the share of non-traditional exports, which includes coconut water, milk, milk powder, cream, has been increasing, a trend driven by the increasing global consumer preference for organic and healthy products.
The Philippines is currently the second largest coconut producing country in the world and the largest exporter of coconut products.
In 2017, the Philippines produced 14 million metric tons (MT) of coconut, accounting for 23 percent of the total world production. The country also exported $2.3 billion worth of coconut products in 2017.
“From the dominance of coconut oil as the main product for export, the market profile has shifted into a multi-product industry with non-traditional coconut products gaining popularity especially with the growing concern for health and wellness,” the UA&P said.
Demand for non-traditional coco-based product is fueled mainly by coconut water, which is one of the fastest growing beverage categories in the global market.
Coconut water exports significantly grew by 154 percent per year on volume and 159 percent per year on value over the past 10 years. Based on Philippine Statistics Authority (PSA) data, 2018 exports totaled 63 million liters of coconut water valued at $89 million to different parts of the world, with the United States as its biggest market.
Vita Coco, the global leader in coconut water with 26 percent of the global market, has a volume requirement of 120 million liters per year supplied by nine manufacturers including Philippine companies Axelum Resources Corporation and Century Pacific Agricultural Ventures. Vita Coco is targeting 150 million liters in 2019.
The UA&P said coconut water has vast export possibilities. Based on estimates by market research company Technavio, the global coconut water market is projected to grow from 536.9 million liters in 2016 to 1.3 billion liters by 2021 for an annual compounded growth rate of 26.75 percent.
Aside from coconut water, other non-traditional products also offer promising new export opportunities. Coconut milk, for example, is now an alternative coffee creamer in the United States.
Gluten and dairy-free coconut milk is a growing and acceptable substitute to cow’s milk for consumers who are lactose-intolerant too.
In general, the UA&P said the key trends that will drive the coconut industry include health and wellness concerns; increasing preference and premium for organic products; the need for certifications and audits from different certifying bodies especially for big markets like the United States and European Union; traceability down to the farm and production practices; and the growing concern for the environment, especially the campaign for a plastic waste-free world.
At present, the local coconut producers are still lobbying for the increase of Coco Methyl Ester (CME) content on all fuels and are even willing for gradual adjustment.
Increasing the CME content of all fuels is part of the solutions the Department of Agriculture (DA) came up with to address the falling prices of copra.
Agriculture Secretary Emmanuel Piñol said the increase in the use of coconut oil in the biodiesel program from two percent to five percent would effectively use up an estimated 200,000 MT tons of copra.