Newsbrief 53

For week ending August 20, 2009

UCAP PUBLICATIONS NOW AVAILABLE

The UCAP Coconut Industry Kit, Series of 2008, Issue 2009 is now available. The Kit, issued annually in July, contains statistical information on the Philippine coconut situation and trade for the year 2008 and earlier, as well as on other oils and fats in the international market.

The latest edition of the Directory of Coconut Establishments in the Philippines (Volume IV, Number 1, Issue 2009) is now available. The Directory, which is updated every two years, contains references to 381 coconut establishments in the country. To order, please contact the UCAP Secretariat at Tel. 632-6338029, Fax 632-6338030, or email at ucap@ucap.org.ph.

PHILIPPINE COCO PRODUCTS EXPORT UP IN MAY

Official data from the Philippine Coconut Authority (PCA) show Philippine export of coconut products rose 9.0% in May to 103,854 MT in copra terms from same month last year total at 95,271 MT. Gross export receipts, however, fell sharply by 36.4% to USD61.631 million from USD96.935 million mainly on lower traded prices.

The increment was mainly credited to coconut oil which sizably expanded lifting at 55,555 MT from 46,132 MT last year (+20.4%). Other major exports reflected shortfall. Copra meal fell 20.6% to 32,030 MT from 40,358 MT, desiccated coconut dropped 15.2% to 8,837 MT from 10,424 MT, and oleochemicals plunged 66.1% to 2,010 MT in copra terms from 5,929 MT. Other products performed as follows, in MT: coco shell charcoal 2,617 (+34.3% from 1,949), activated carbon 2,179 (+56.9% from 1,388), glycerin 1,882 (+75.5% from 1,072), fresh coconuts 37 (-55.3% from 82), Others 2,246 (+17.5% from 1,911).

Cumulative figure for January-May amounted to 393,580 MT in copra terms. This reduced by 48.3% same period last year total of 760,700 MT. Breakdown is as follows, in MT: coconut oil 193,029 (408,909 last year), copra meal 100,537 (226,991), desiccated coconut 50,157 (46,074), oleochemical in copra terms 9,639 (40,403); coco shell charcoal 12,985 (7,911), activated carbon 8,875 (9,550), glycerin 7,476 (7,195), fresh coconut 606 (499), Others 12,186 (11,755).

DESTINATIONS OF COCONUT OIL EXPORT IN MAY

The PCA data also show coconut oil export in May consisted of 41,800 MT crude coconut oil, 11,487 MT cochin oil (refined, bleached oil), and 2,267 MT RBD oil. Europe was the top market responsible for 38,665 MT (69.6% of coconut oil aggregate), with US a far second at 6,014 MT (10.8%). Other significant buyers were based in Asia namely Japan with uptake at 3,665 MT (6.6%), China with 3,325 MT (6.0%), and Korea 2,501 MT (4.5%).

Europe was primary destination for crude coconut oil with 38,662 MT mainly for Netherlands 32,662 MT and Spain 6,000 MT. Japan also purchased substantial volume at 3,018 MT while Hongkong and Taiwan took in limited load at 60 MT apiece. The US was market leader in cochin oil cornering 6,000 MT, trailed by Japan 2,915 MT, Korea 2,500 MT, China 51 MT and Taiwan 21 MT. RBD oil had wider market exposure but with smaller sales volume. Iran led the pack with 782 MT, with Japan a strong second at 750 MT, followed by China 255 MT, Pakistan 201 MT, Russia 106 MT, and Israel 63 MT. Deliveries to other countries were much lower: Australia 37 MT, Bangladesh 37 MT, Egypt 17 MT, and Korea 1 MT.

?OF COPRA MEAL

Export of copra meal in May at 32,030 MT went mainly to Korea and Vietnam. The former remained as leading buyer with purchases of 16,800 MT (52.5% share) while Vietnam remained in the second spot with 14,222 MT (44.4%). Other destinations were Taiwan 826 MT, China 100 MT, Hongkong 49 MT, and Japan 34 MT.

?OF DESICCATED COCONUT

Export of desiccated coconut in May at 8,837 MT went to 44 countries worldwide. This month recorded the widest market coverage for this year, exceeding January at 38 countries, February at 43, March and April respectively at 42 and 41. The US remained the market leader with 3,085 MT accounting for over one-third (34.9%) of total turnover. The next level of major buyers that included Belgium 686 MT, France 641 MT, Netherlands 570 MT, and United Kingdom 547 MT, together represented 27.8% of the market. Other major importers with volume ranging 110-492 MT and aggregating 2,467 MT jointly contributed 27.9%, namely Germany, Australia, Turkey, Canada, Japan, China, Spain, New Zealand, Chile, Taiwan, and Korea. Twenty-eight countries with combined market share of 9.5% had purchases ranging 5-88 MT for a total of 841 MT.

?OF COCO SHELL PRODUCTS

All of coconut shell charcoal exports in May amounting to 2,617 MT were delivered to Asian countries. More than two-thirds (69.5%) or 1,818 MT went to Japan, the market leader. The remainder was distributed as follows: Singapore 517 MT, Korea 138 MT, China 106 MT, and Taiwan 38 MT.

In the case of activated carbon, more than three-fourths (78.8%) of orders in May were made by seven countries led by the US with 676 MT (31.0% share), trailed by Japan 251 MT (11.5%), Italy 242 MT (11.1%), Senegal 154 MT (7.1%), Germany 151 MT (6.9%), Ghana 132 MT (6.1%), and South Africa 110 MT (5.0%). Eleven other countries together accounted for the remaining 21.2% or 463 MT with uptake ranging 10-91 MT.

UNILEVER PHILS SEEKS CONSULTATIONS ON PROPOSED REVIVAL OF EXECUTIVE ORDER 259

Unilever Philippines Vice-President for Corporate Development Chito Macapagal, is seeking consultations on the proposed revival of Executive Order (EO) 259, a measure requiring soap and detergent makers to use 60 percent biodegradable oleochemicals, such as those derived from coconut oil, in their soap and detergent products. While Unilever was open to the idea and was one of the last companies to switch from using coco-based oleochemicals to petrochemicals, Macapagal said the previous effort to spur growth in the coconut industry through this imposition resulted in ?no more than 2 percent improvement in farm revenue.? Unilever currently uses mainly petrochemical substances in its soaps and detergents.

Macapagal was reacting to a proposal of Jesus L. Arranza, the new president and CEO of CIIF Oil Mills Group, to revive the Executive Order which was implemented in the 1990s. Arranza said in an earlier interview that he was drafting a bill similar to EO 259. He said if the measure is revived, it will give a boost to local coconut farmers and the coconut industry and at the same time, it is environment-friendly.

PHILIPPINE FOOD EXPORTERS BAGGED $15 MILLION DEALS IN TAIWAN FOOD FAIR

Antonio I. Basilio, MECO (Manila Economic and Cultural Office in Taipei) resident representative in Taipei reports local food manufacturers that participated at the recently concluded Taipei International Food Show (Food Taipei 2009) bagged $15 million worth of sales, nearly double the orders generated in the 2008 event at $8 million. Food Taipei is one of Asia-Pacific?s biggest food industry expositions held annually. A couple of coconut firms joined the Philippine delegation namely, Prosourse International (virgin coconut oil), San Pablo Manufacturing Corp. (refined coconut oil), RPM Pili Nut Candies (pili nuts, coconut jam).

ASEAN-INDIA TRADE DEAL TO HIKE INDONESIAN CRUDE PALM OIL EXPORT

Derom Bangun, vice president of the Indonesian Palm Oil Board said the country?s crude palm oil (CPO) exports to India will increase by up to 10% next year, following the implementation of the ASEAN-India free trade agreement. The deal would require India to gradually reduce its import duty on CPO between 2010 and 2019, from the current 80% to 37.5%. Mr. Bangun added that Indonesia?s CPO penetration to the Indian market will improve despite constant competition with Malaysia, seen from the same tariff decrease. Lower import duties would give Indonesia a chance to significantly expand its CPO exports to India as palm oil becomes more competitive with other vegetable oils, like soya oil.

JAPANESE EDIBLE OIL IMPORT DOWN IN FIRST HALF 2009

Japanese edible oil imports in the first half of 2009 marginally slid by 1.0% year-on-year based on figures from Japan Customs. Total stood at 377,183 MT compared to 381,033 MT last year. Palm oil was Japan?s main imported oil, making up 70% of its total edible oil imports at 265,318 MT, a relatively steady trend from 263,956 MT in 2008. Malaysia was top supplier at 259,002 MT (263,306 MT last year), followed by Indonesia with 6,099 MT (158 MT).

Palm kernel oil was second biggest import with total at 35,264 MT, 11% higher than last year at 31,751 MT. Malaysia supplies virtually all of Japan?s palm kernel oil imports. Coconut oil import at 21,360 MT dropped 20% from last year at 26,924 MT. The Philippines supplies almost all of the country?s import. Soya oil import dropped by 25% to 14,061 MT from 18,768 MT, while sunflower oil was relatively steady at 16,321 MT versus last year?s 16,579. Other imports were olive oil 13,482 MT, rapeseed oil 9,996 MT, cottonseed oil 1,116 MT, peanut oil 204 MT and corn oil 61 MT.

DROP IN PALM OIL PRICES ANTICIPATED IN THE NEXT FEW MONTHS

At a palm oil conference in Istanbul, Turkey recently, Dorab Ministry, director of Godrej International Ltd. and noted vegetable oil analyst projected that the price of the commodity could drop to M$2,000 (US$571) a ton if inventories pick up in September as production peaks. The present tight supply situation, however, will keep prices in the range M$2,100-2,300/MT for the next few weeks until the data provides guidance, he added. Another analyst, Hoe Lee Len, RHB Research agreed with Mistry?s projection that crude palm oil prices would drop in the short term and believes a recovery happening toward the end of the year. However, he projected a price range of M$2,000-2,500/MT for the period June through to October.

HIGH-FAT DIET LINKED TO POOR MENTAL FUNCTION - STUDY

The study, led by Dr. Andrew Murray at Oxford University, found that animals fed a high-fat diet for nine days could run 50 per cent less far than their counterparts fed a standard rodent diet, while they also made mistakes sooner in the maze task, suggesting that their cognitive abilities were also being affected by their diet An investigation of the metabolic changes also revealed increased levels of a specific protein called the ?uncoupling protein? in the muscle and heart cells of the high-fat-fed rats. This protein reportedly ?uncouples? the process of burning food stuffs for energy in the cells, reducing the efficiency of the heart and muscles. The researchers also noted an increase in heart size in the high-fat diet-fed animals.

The standard diet-fed animals obtained 7.5 percent of their calories from fat, while the high fat diet-fed animals obtained 55 percent of their calories from fat. Dr. Murray said ?the high-fat diet, in which 55 percent of the calories came from fat, sounds high but it?s actually not extraordinarily high by human standards. A junk food diet would come close to that.? He added, ?Some high-fat, low-carb diets for weight loss can even have fat contents as high as 60 percent. However, it?s not clear how many direct conclusions can be drawn from our work for these diets, as the high-fat diet we used was not particularly low in carbs.?

The study, funded by the British Heart Foundation and published in the FASEB Journal, has potential implications for people eating lots of high-fats foods, as well as patients with metabolic disorders. It also draws attention to formulations in the food industry, with reduction of fat in products a growing area of interest to food manufacturers as consumers continue to seek out low-fat and low-calorie versions of their favorite foods.