In the foreign trade sector, the coconut product exports have been consistently growing (Table 2.11). In 1973, it registered an impres- sive contribution of $US416 million to the country's foreign exchange earning compared with $US187 million twenty-four years ago. Of the four major coconut product exports, coconut oil has been characterized by an
1. Desiccated coconut is manufactured from the white part of the kernel. The white meat is shredded or disintegrated and dried to about 2 per cent moisture.
COCONUT/COPRA PRODUCTION AND OIL MILL RATED CAPACITY BY REGION, 1972 Region (a) Production (b) Copra Equivalent (c) Copra Production (b) Rated Mill Capacity (d) Regional Excess Production (e) I 55922 12426 1227 8500 - 7473 II 960332 213386 129360 669450 -540090 III 232980 51768 45334 182500 -137166 IV 1610551 357864 357833 260350 + 97483 V 660629 146792 143324 8700 +134624 VI 1778304 395139 352341 40250 +312091 VII 3125697 694530 673364 195750 +477614
(a) See footnote to Table 2.3.
(b) Based on United Coconut Association of the Philippines Inc.: Coconut Statistics 1973, Vol.VI, No.4 (unit is in thousand nuts).
(c) Computed on the basis of 4,500 nuts per metric tonne of copra. (d) Based on machinery name plate.
(e) Computed on the assumption that the name plate rating of the machinery and equipment can be attained.
REPUBLIC OF THE PHILIPPINES
DEPARTMENT OF AGRICULTURE AND NATURAL RESOURCES QUEZON CITY
Pangasinan Mfg. Co. (30 Tayabas Oil Co. (60 Tantuco Industrial (110 Central Veg. Oil Co.(150 Imperial Veg.Oil Co.(450 Phil. Rfng. Co. (275 mt) Proter & Gamble (250 mt) Int'l Oil Factory (175 m Royal Int'l Dev. Corp.
(130 mt) Po Man Hlng (47 mt)
Sun-Ripe Coconut Products (60 mt) Peter Paul Phils. (50 mt) Blue Bar Coconut (30 mt) Coco-Complex (20 mt) San Pablo Mfg.Corp.(400 mt) Franklin Baker Co. (15 mt) Legaspi Oil Co. (300 mt Tantuco Enterprises(170 mt Royal Mfg. Co. (115 mt Lucena Oil Factory (100 mt) N.D.C. (125 mt Lu Do & Lu Ym (600 mt) Cebu National Products
(63 mt) Calixto Yongco
(63 mt) La Pueba(20 mt) Legaspi Oil Co. mt] mt N.D.C. (250 (125 Visayan Mfg. (55 mt) fO^ C Eastern Visayas N.D.C. (125 mt)
Phil. Int'l Dev. Co. (280 mt)
ortpern & Eastern Mindanao
FIGURE 2.1
accelerated growth. In 1950, the share of coconut oil in gross export revenue derived from coconut products was only 12.6 per cent. Hovering between 9 per cent and 13 per cent in the period 1950 to 1960, the share moved up to 37.86 per cent in 1973, or about 300 per cent of the 1950 record. Copra meal, a joint product of coconut oil, showed a similar
increase in share, from 2.02 per cent in 1950 to 5.51 per cent of the total coconut product export revenue in 1973. The share of copra meal did not increase proportionately with that of coconut oil, for two reasons:
(a) the price of copra meal is not highly correlated with that of coconut oil and (b) the intensified government program to develop the poultry and livestock industry has resulted in a continuously increasing demand for copra meal in the domestic market. On the other hand, the share of desiccated coconut exported has remained stagnant, as can be seen from Table 2.11. With respect to copra, revenue has dwindled from 73.71 per
cent in 1950 to 48.82 per cent in 1973. This sharp decline has been brought about by an increase in coconut oil exports without a parallel gain in coconut output.
In terms of absolute increase in export revenue, coconut oil has experienced a growth of $US3.61 million per annum during the period
1950 to 1973, reflecting a relatively Impressive gain of 8.03 per cent yearly, compared with other coconut product exports (Table 2.12). Desiccated coconut and copra contributed a slight increase in export revenue, while earnings from copra decreased.
The growth in export volume is a little higher than the growth in export revenue (except for copra meal, Table 2.13), indicating a decline in the prices of the three major coconut products.
TABLE 2.11
PERCENTAGE SHARE OF FOUR MAJOR COCONUT PRODUCT EXPORTS AND TOTAL f.o.b. VALUE, 1950-1973
Year Coconut Oil (per cent) Copra Meal (per cent) Desiccated (per cent) Copra (per cent)
(
(US Total 000 ) dollars) 1950 12.62 2.02 12.05 73.31 186731 1951 13.77 1.74 7.07 77.42 196344 1952 14.80 4.51 7.31 73.38 124327 1953 13.14 2.53 9.46 74.86 155073 1954 11.91 2.44 8.12 77.53 154876 1955 10.23 2.83 7.66 79.28 155717 1956 13.39 2.85 6.95 76.81 178638 1957 12.01 2.60 8.33 77.06 183463 1958 14.60 2.37 9.64 73.39 170488 1959 12.28 3.12 10.78 73.82 186582 1960 8.54 2.44 10.25 78.77 180929 1961 11.16 2.91 10.88 75.05 131891 1962 17.03 5.00 8.55 69.41 184505 1963 21.62 4.81 7.98 65.59 235336 1964 25.69 4.54 7.97 61.79 236884 1965 25.95 4.75 8.22 61.08 269933 1966 28.79 6.69 7.11 57.41 263975 1967 27.23 5.50 8.01 59.26 213780 1968 32.00 4.62 11.62 51.74 256892 1969 31.10 5.64 8.88 54.38 179976 1970 46.74 6.88 8.86 37.52 204013 1971 40.47 6.16 8.31 45.06 259263 1972 35.20 7.28 7.67 49.75 238541 1973 37.86 5.51 7.81 48.82 416187Source: United Coconut Association of the Philippines Inc.: Coconut Statistics 1973. Vol.11, No.4; and
TABLE 2.12
COMPARATIVE RATE OF GROWTH OF COCONUT PRODUCT EXPORT AND TOTAL EXPORT REVENUE, 1950-1973
Export Absolute Increase ( million ) (US dollars) Percentage Increase or Decrease Total export 35.05 5.32 Copra -0.19 -0.02 Coconut Oil 3.61 8.03 Desiccated Coconut 0.81 1.20 Copra Meal 0.62 7.91
Note: Annual absolute increase is computed as the slope of linear annual trend equation to the time series export data.
Percentage increase is obtained from the efficient of exponential trend equation to the time series export data.
Source: United Coconut Association of the Philippines Inc.: Coconut Statistics 1973. Vol.11, No.4; and
National Economic and Development Authority: NEDA Yearbook 1974. (Republic of the Philippines, Manila, 1974).
TABLE 2.13
COMPARATIVE RATE OF GROWTH OF COCONUT PRODUCT EXPORT VOLUME 1950-1973
Produce Absolute Increase (metric tonnes p.a.)
Percentage Increase or Decrease Copra 474.83 0.06 Coconut Oil 16609.70 9.49 Desiccated Coconut 872.48 1.54 Copra Meal 658.86 7.78
Note; Annual absolute increase Is computed as the slope of linear annual trend equation to the time series export data.
Percentage increase is obtained from the efficient of exponential trend equation to the time series export data.
Source; United Coconut Association of the Philippines Inc.: Coconut Statistics 1973. Vol.11, No.4; and
National Economic and Development Authority:
NEDA Yearbook 1974. (Republic of the Philippines, Manila, 1974).
2.5.1 Direction of Trade of Coconut Products
Areas of "competition and substitution" of fats and oils vary from country to country. The choice of oil used domestically is primarily
dictated by the degree of protection afforded to locally produced fats and oils.
The direction of trade is significantly influenced by trade agreements and traditional relations of the importing and exporting countries. Thus the ratio of the price of copra to the finished pro- ducts, like coconut oil and desiccated coconut, is primarily determined by the tariff structure of the importing countries.
The United States is still the major market for Philippine coconut products because of the trade agreement by which the Philippine exports are entitled to preferential rates of duty within a given quota.^ Recently, however, the European Economic Community has emerged as an important outlet for the Philippine coconut products.
2.5.1.1 Copra - During the early part of 1960, USA vegetable oil refiners preferred to import copra for crushing into oil. Moreover, the development of soybean and cottonseed for meal production has resulted
in a decline in the demand for copra in the USA. Although copra is entitled to a duty free entry, oil refiners in the USA found it more economical to import Philippine-produced coconut oil because it contains lower free fatty accids. This is due to the copra being crushed when in
2 a fresher state. It can also be refined at a relatively lower cost. 1. The Philippine Trade Agreement (Laurel-Langley Agreement) with the
USA was terminated on July 3 , 197A. Negotiations are presently being conducted.
2 . Refining is in practice compulsory for all fats and oils for human consumption. The cost is influenced by the degree of hydrogenation required; the higher the free fatty acid content of oil, the more intensive is the hydrogenation process. Roughly one cubic metre of hydrogen is needed to lower the iodine number (measure of free fatty acid content) of one metric tonne of fat or oil by one point.
In addition, importing coconut oil has the advantage of lower shipping costs and reduced effect of the competition between copra meal and the highly protected soybean and cottonseed meals.
In 1950, the copra exports to USA were 45 7,800 metric tonnes, in sharp contrast to 195,263 metric tonnes in 1973 (Table 2.14). Since 1950, the copra export to the USA has been decreasing at the rate of 6.63 thousand metric tonnes per annum. However, the decline in exports to the USA has been conqiensated by an upward demand for copra in Europe. The rate of growth of copra exported to Europe is computed to be
10.34 thousand metric tonnes per annum. The fluctuations in the volume of exports of coconut products were primarily due to the effects of the
varying weather conditions from year to year on coconut harvested. Librero's study indicated that the aggregate coefficient of