Newsbrief 7

For week ending Feb. 14, 2008

ALL SET FOR CHINESE NEW YEAR AT COCOHOUSE

As announced at last month’s Cocohouse function in Valle Verde Country Club, the next Cocohouse luncheon will take place next week on February 19, 2008, Tuesday, at 12:00 noon. As the date is still within the two-week Chinese New Year celebration period, Cocohouse is welcoming the Year of the Rat with a special New Year Prosperity Yee Sang or Yu Seung luncheon at the Mindoro function room, 2nd Floor, Mezzanine level of EDSA Shangrila Plaza Hotel, #1 Garden Way, Ortigas Center, Mandaluyong City. This month’s sponsor will be the brokers’ group, the Association of Coconut Brokers, Inc. headed by UCAP Director Enrique J. Uy.

For the first time in many years, Cocohouse will celebrate the Chinese New Year. The Yee Sang menu is designed and arranged to attract prosperity and good health for all of us in the coconut industry. Yee Sang is served only during the Chinese New Year, especially in Singapore and Malaysia.

PHILIPPINE COCO EXPORT DOWN IN NOVEMBER 2007

Official figures from the Philippine Coconut Authority show export of Philippine coconut products in November 2007 dropped 15.6% year-on-year to 141,293 MT in copra terms from 167,399 MT. Gross export receipts, however, which amounted to USD97.800 million, sharply exceeded year-ago data at USD78.713 million by 24.2%, mainly on vastly improved prices.

All of major exports but copra meal reported deficit in volume traded. Coconut oil shipment at 73,329 MT registered a shortfall of 11.2% from 82,567 MT year-ago; delivery of desiccated coconut was slightly reduced by 2.9% at 11,017 MT from 11,348 MT; trade in oleochemicals shrank significantly by 58.2% at 7,865 MT as copra from 18,796 MT. On the other hand, export of copra meal shot up by 65.0% to 44,805 MT from 27,147 MT. Other products performed as follows, in MT: coco shell charcoal 2,193 (-18.4% from 2,687 year-ago), activated carbon 3,557 (+45.7% from 2,441), glycerin 1,585 (+63.1% from 972), fresh coconuts 35 (-66.5% from 105), Others 2,447 (+30.4% from 1,876).

Cumulative figure for January-November 2007 at 1,512,815 MT copra terms lagged sharply from 1,873,737 MT at the same time year-ago by 19.3%. Breakdown is as follows, in MT: coconut oil 777,060 (984,647 year-ago), copra meal 366,243 (400,201), desiccated coconut 121,520 (126,715), oleochemicals as copra 91,508 (114,894); coco shell charcoal 23,021 (24,257), activated carbon 27,770 (30,822), glycerin 14,902 (10,558), fresh coconuts 657 (1,990), Others 25,517 (24,877).

DESTINATIONS OF COCONUT OIL EXPORT IN NOVEMBER 2007

The official data also show export of coconut oil in November consisted of 34,324 MT crude coconut oil (CNO), 35,825 MT cochin oil (refined, bleached oil), and 3,180 MT RBD oil. Top destination was the US with 49,155 MT (67.0% of total) made up of 18,006 MT CNO, 31,083 MT cochin oil, and 66 MT RBD oil. US was market leader in both CNO and cochin oil during the month. Europe was second biggest outlet with 11,000 MT of CNO (15.0%), mainly for the Netherlands.

Outside of the traditional markets US and Europe, Japan took the lead with 10,079 MT (13.7%) comprising of 3,150 MT CNO, 4,429 MT cochin oil, and 2,500 MT RBD oil; the country was the top buyer of RBD oil for the month. Substantial volume of coconut oil was also sold to Malaysia at 2,000 MT of CNO. Like Japan, China was also importer of the three types of coconut oil. Of total uptake of 487 MT, 62 MT was CNO, 305 MT was cochin oil, and 120 MT was RBD oil. Other markets were Iran with 372 MT, Taiwan with 114 MT, Russia with 85 MT, Pakistan 19 MT, and Bangladesh with 19 MT. Except for Taiwan which took in a mix of 105 MT CNO and 9 MT cochin oil, the rest purchased RBD oil only.

…OF COPRA MEAL

Korea remained the primary buyer of Philippine copra meal with purchases amounting to 32,230 MT (71.9% of total), and still trailed by Vietnam with 7,938 MT (17.7%). Other destinations were US with 3,000 MT, Taiwan with 1,517 MT, and Japan with 120 MT, for a combined market share of 10.4%.

... OF DESICCATED COCONUT

Desiccated coconut was shipped to 40 various countries in November chiefly to the US with volume at 2,862 MT accounting for 26.0% of total. The United Kingdom held the second biggest load at 1,744 MT sharing 15.8%. The next group of big importers which consisted of Canada with 877 MT, Belgium 859 MT, Netherlands 707 MT, and Australia 504 MT together was responsible for 26.8%.

Significant volume (104-458 MT) also went to a dozen countries and jointly made up 25.7% of the market. This comprised of the following in descending order: Taiwan, Germany, Korea, Japan, France, Romania, Mexico, China, Spain, South Africa, Chile, and Turkey. Twenty-two countries with aggregate uptake of 632 MT and market share of 5.7% bought between 3 MT and 75 MT.

…OF COCO SHELL PRODUCTS

Japan continued to dominate the coconut shell products business. In the coconut shell charcoal sector, it accounted for 81.0% of total Philippine export with 1,777 MT. Trailing behind was Korea with 285 MT, China 93 MT, and Hongkong 38 MT.

Activated carbon had a more diversified market with Japan leading some 20 countries with her uptake of 1,572 MT (44.2%). Substantial volumes were also exported to US with 514 MT, France 390 MT, Germany 252 MT, Ghana 132 MT, Korea 122 MT and China 103 MT. Fourteen other countries took in smaller volume ranging from 250 kg. to 95 MT, the total amounting to 472 MT was responsible for 13.3%.

PRESIDENT ARROYO EXHORTS FARMERS IN LUZON TO PLANT COCONUT TREES

President Gloria M. Arroyo is urging farmers in Luzon to plant more coconut trees to help sustain the country’s biofuels program. At the recently concluded Philippine Energy Summit, she cited biodiesel manufacturer Chemrez Technologies, Inc. for helping the government gain headway toward energy independence. Chemrez’s current biodiesel capacity is 60,000 metric tons a year and plans to increase it by 50 percent to 90,000 MT by the middle of the year, setting aside a capital expenditure to $2 million for the expansion.

For its part, the publicly-listed firm thanked the president for her support to the emerging biofuels industry. Chemrez noted that it currently has no problem with procuring enough coconut oil for its biodiesel plant which has more than adequate output to meet the demand for biodiesel at the current one percent blend mandated by law. Chemrez also cited the automotive industry, as represented by the Chamber of Automotive Manufacturers of the Philippines Inc. for being supportive of the use of biofuels for as long as quality controls are strictly implemented. The government is also looking at accelerating the implementation of the Biofuels Law as it is one of the recommendations raised by industry stakeholders during the Energy Summit.

SRI LANKAN DESICCATED COCONUT EXPORT DOWN IN OCTOBER 2007

Figures from the Coconut Development Authority (CDA) in Sri Lanka show the country exported 3,115 MT of desiccated coconut in October 2007. This is a sharp drop by 28.5% from figure in the same period year-ago at 4,354 MT. The shipment was worth USD3.857 million as against USD4.002 million year-ago. Calculated average price was USD1,238.27/MT FOB, a sharp rise by 34.4% from prior year at USD921.60/MT. Total export in January-October 2007 at 40,097 MT, slightly augmented by 16.5% a comparable year-ago period total at 34,427 MT.

Export in October 2007 went to 28 countries. The top four importers held volumes above 200 MT and collectively accounted for 49.4% of total trade. Leading the pack was Pakistan with 612 MT, followed by UAE/Dubai with 499 MT, Germany with 228 MT and Angolia with 200 MT. Six other countries took in between 125 MT and 170 MT and together comprised 28.9% of the market. They were as follows, in descending order, Saudi Arabia, Portugal, UAR/Egypt, France, Spain and Iran. The remaining eighteen other countries with combined share of 21.7% bought volume ranging 2 to 98 MT.

THAILAND’S ENERGY FIRM PTT TO INVEST IN PALM OIL PRODUCTION

Thailand’s largest energy company, PTT is to expand into palm oil production in Indonesia. The expansion will be via acquisition of major stakes in the Indonesian palm oil producer Mitra Aneka Rezeki. PTT President and Chief Executive Prasert Bunsumpun said that a new wholly owned company called PTT Green Energy Company (PTTGE) would be established to invest in the plantations and crude palm oil production with registered capital of $28 million. Mitra Aneka Rezeki holds a license for palm tree plantation in western Kalimantan.

Mitra Aneka Rezeki sees great potential for crude palm oil due to rising concern over global warming and soaring fuel prices. It plans to sell most of its output to the local palm oil industry, and export the remainder to Asia. The company is considering building other plants for upstream crude palm oil products.