PCA, stakeholders push for enforcement of 5% bio-diesel blend

To arrest the detrimental affects of plunging price of copra, the Philippine Coconut Authority (PCA) and industry stakeholders are urging the government for the immediate implementation of the Biofuels Act of 2006 or Republic Act No. 9367.

The RA 9367 mandates that all fuels sold in the domestic marker must be blended with five percent coco methyl ester (CME) derived from copra - dried coconut kernel, where coconut oil is extracted.

Citing a resolution signed by industry stakeholders, PCA administrator Romulo dela Rosa said the production of 5-percent biodiesel blend or B5 can help address the plummeting copra prices.

"B5 is important because it will give immediate relief to coconut farmers, it can increase the price [of copra] by around P3 because the demand will go up," Dela Rosa said in a forum on Saturday.

The PCA administrator said 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 remote areas is below the break-even copra production price of P15 per kilo, he said.

The very low prices of copra, the resolution pointed out, is adversely affecting the livelihood of 3.5 million coconut farmers and their families as well as the coconut-based export sector, he added.

Dela 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 price of copra in the international market has slumped, which in turn affect domestic prices," he said.

The PCA administrator said the country’s coconut industry is highly dependent on foreign markets, thus increasing the domestic demand of coconut products can help wean the industry from the caprices of the global vegetable oils market.

Citing a study by the Asian Institute of Petroleum Studies Inc., dela Rosa said the biofuels industry would need at least 360 million liters of CME per year if it will implement the 5 percent bio-diesel blend.

To produce this amount of CME, some 489.8 million kilos of copra is needed, he said.

Also, Dela Rosa said he is confident that the local industry can produce the copra requirements needed to implement the 5-percent biodiesel blend.

Dela Rosa is also 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.

“Because they have many co-products coming out of the whole nut, these plants enable the industry to absorb declining prices somewhere in the market thus ensuring stable coconut prices at the farm level,” he said.

"Farmers are less affected by price shocks and coconut farmers shall have predictable incomes which will encourage them to introduce good agricultural practices in their farms.” —Ted Cordero/LBG, GMA News