USDA sees PHL coconut oil exports growing at 8%

Posted on April 06, 2017

PHILIPPINE COCONUT oil (CNO) exports are expected to grow 8% in the 2016-2017 market year (MY) on the back of increased production of copra as the country returns to normal weather conditions, a US government agency said.

Drying kernels of copra -- the flesh of the coconut -- AFP
In a report posted on its Web site on Wednesday, the United States Foreign Agricultural Service said that CNO exports are expected to hit 820,000 tons in MY 16/17, up 8%.

The latest estimates are higher than the 6.25% year-on-year climb the USDA projected in its April 2016 report.

CNO shipments are expected to expand further in the next market year, to grow 7% to 880,000 tons in MY 17/18 as copra production rises.

Copra production for the current period is forecast at 2.2 million tons -- which approximates industry’s production forecast for 2017 -- or 5% higher from the 2.1 million tons recorded in MY 15/16.

“[Coconut] trees have begun to recover from drier-than-normal conditions that resulted from El Niño weather patterns through the first half of 2016,” the USDA said.

For the next market year, copra output is expected to rise slightly to 2.3 million tons in MY 17/18.

“Overall domestic CNO consumption is expected to decline in MY 16/17 and remain at this level in MY 17/18 as a result of substitution for more competitively-priced palm oil,” said the USDA.

Consumption is expected to decline to 580,000 tons in MY 16/17, from the 600,000 tons in MY 15/16, and flat in MY 17/18 mainly due to palm oil substitution.

“Substantial imports of palm oil are expected to displace some CNO food use through MY 17/18 while industrial CNO consumption is expected to remain flat,” the report added.

Estimates of CNO production for MY 16/17 are at 1.42 million tons and it projects MY 17/18 to yield 1.48 million tons due to a mild recovery in copra output.

For the Philippines’ soybean meal (SBM) imports, the agency forecasts an increase of around 5% year on year amid strong demand from expanding hog and poultry industries coupled with investments in feed grain storage and distribution infrastructure.

SBM imports are forecast to hit 2.65 million tons in MY 16/17 and 2.8 million tons in the next market year, during which SBM from the US is forecast to account for 60% of overall imports.

“Local soybean oil (SBO) production and trade are insignificant due to the local preference for CNO or palm oil (depending on price),” the report read.

The Philippines is the second-largest market for US SBM, next to Mexico, and is the world’s largest CNO exporter. -- Janina C. Lim