The Philippine Coconut Authority is considering a proposal to bar coconut oil exports if domestic demand has not been met
MANILA, Philippines — The Philippine Coconut Authority (PCA) is considering to implement a policy to secure the country’s coconut supply due to supply constraints and increasing prices.
The PCA has yet to formally request the Department of Energy (DOE) to suspend the mandated increase in biofuel blend scheduled for October.
However, the agency is leaning toward a percent retention policy. That means a portion of the domestic coconut oil supply will be reserved for domestic demand, including biofuel blend requirements, before exporting any surplus.
“This proposal is seen as a proactive measure to safeguard the needs of the transportation and logistics sectors amid rising demand and tightening supply,” the PCA told the Inquirer.
The agency is looking at the proposal’s viability and broader economic implications. The objective is to secure supply and stabilize prices without disrupting the country’s export commitments.
Proposals and consultations
“These measures will only be implemented after more thorough consultations with concerned industry actors,” it added.
Deferring the scheduled 1-percentage-point increase in the coco-methyl ester (CME) blend in all diesel products this October is one of the proposals from industry stakeholders.
According to the PCA, stakeholders advocated for an immediate dialogue with the National Biofuels Board to assess the impact of the increased blend on domestic coconut oil supply and pricing. They suggested a potential temporary adjustment to prioritize cooking oil availability for consumers.
Stakeholders made the suggestion amid rising prices of cooking oil and other coconut products. This could strain the operations of processors and affect Filipino consumers if not addressed.
Data from the PCA show that farm-gate, mill site and retail copra prices have been rapidly increasing due to a combination of factors. These include strong overseas demand for coconut oil and tight local supply due to adverse weather.
As of April 10, farm-gate copra prices averaged P60.71 per kilogram. This means a twofold increase from P30.43 per kg a year ago.
Average mill-gate prices reached P79.72 per kg, surging by over 100 percent from P39.65 per kg.
Mandated biodiesel blend
Under the Biofuels Act of 2006, all industry players are mandated to blend CME with all diesel sold in the country.
CME is a form of biodiesel derived from coconut oil, making it a renewable fuel source.
The CME blend in diesel was raised to 3 percent from 2 percent starting Oct. 1, 2024.
The mandated ratio will be raised further to 4 percent by volume by Oct. 1, 2025 and 5 percent by Oct. 1, 2026.
The DOE had said that higher CME blend is expected to benefit coconut farmers, biodiesel producers and other industry stakeholders .
It noted that about 900 million additional coconuts are needed to produce 100 to 120 million liters of CME requirements to meet the mandatory increase in CME blend.
“Consumers will benefit with an increase in mileage from the average of 10 kilometers per liter of diesel to less than 11 kilometers,” it added.
Source: Philippine Coconut Authority seeks policy to ensure supply security
