News article from Bworldonline.com by Bettina Faye V. Roc

Philippine coconut oil exports more than doubled for the month of June compared to the same month in 2011 (indicating the second straight month of recovery for coconut oil exports for the first half of 2012) as a result of better demand and more stable supply. However, another news article [1] stated that coconut oil exports from Eastern Visayas experienced a huge drop where Netherlands (the number one importer of coconut oil) bought 36, 214 MT in the first half of 2011, but did not import at all from January to June 2012. Despite the significant drop in exports by the said region, the group assumes that perhaps shipments of coconut oil from other coconut-producing regions in the Philippines were large enough so as to offset this effect, and still contribute to the growth in the country’s overall exports of coconut oil.

Coconuts are among the country’s major agricultural exports (59% share in world exports), with coconut oil as one of the top ten exports of the country. Although coconut oil exports for June have increased by 246.7% compared to the same period last year, this does not guarantee strong and continuous recovery despite the stable supply. Also, unstable demand may be brought about by the numerous issues confronting the global market such as the ongoing European Crisis. Any change in the palm kernel oil industry, being a strong competitor, may also easily affect the overall performance of the coconut industry. In addition, non-economic factors may also influence the international demand for coconut oil exports such as the quality and health issues concerning coconut oil.

Thus, although coconut oil exports have been recovering for the past two months, it is crucial that the government must continue to take measures in strengthening coconut oil exports. The ongoing European Crisis is a variable they must consider not only because it is a large economy that could affect the world economy but also because it is the country’s number one importer of coconut products. Furthermore, the quality of coconut oil must be improved to address the health issues concerning the product.

These news articles aid the group in their industry analysis as it helps them learn to read news critically--by not immediately accepting or believing what is written in the article--and trains them to do extra research in order to verify the information given.

[1] S. Q. Meniano, “Region 8 coco oil exports post huge drop,” Business World, July 17, 2012, Economy Section, http://
www.bworldonline.com/content.php?section=Economy&title=Region-8-coco-oil-exports-post-huge-drop&id=55326 (accessed
July 19, 2012).



Authors:
Alvarado, Regine
Balmes, Jenalyn
Cerrer, Ysabel
Villanueva, Virgil
tin
7/21/2012 10:21:35 pm

The structure of the commentary is commendable. There are just some follow up questions I'd like to raise, as someone with no background at all about the coconut industry:

1. How big is the share of Eastern Visayas in the whole country's coconut export?

2. The way I understood the article (and please correct me if I'm wrong) is that the coconut exports continued to recover export share despite not being able to export to its number one importer, Netherlands. Is it safe to say that the number 1 importer does not hold a significant market share in the Philippine coconut export industry?

3. What was the main driver that helped continue this recovery despite the loss of the country's number 1 importer?

4. What was the basis for making the eurozone one of the variables the government should consider in strengthening the Philippine coconut industry? Is it because European Union is the region with the highest import share of Philippine coconut oil?

Thanks! Good job!

Reply



Leave a Reply.