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Philippine Coconut Industry: Sets for a Big Rebound via Consumer Products Manufacturing

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Philippine Coconut Industry: Sets for a Big Rebound via Consumer Products Manufacturing
Low coconut oil prices and higher production are translating to increased demand for ‘oleochemicals.’

The downward trend for coconut oil prices, which started in 2018, is expected to end sooner than expected. Most trade analysts and industry experts agree that a big rebound in sales—both in local and in exports—is inevitable. Thus, the outlook for the currently bearish coconut industry is getting rosier.

The Philippine Coconut Authority (PCA), the Department of Agriculture (DA), and various industry groups from the private sector have actively been finding ways to bolster domestic demand for coconut oil. Proposed solutions at hand are feasible and could be readily implemented.

For one, the United Coconut Association of the Philippines (UCAP) has constantly pushed for government approval of a proposal to increase coconut oil content in biodiesel (from 2 percent at present to as much as 5 percent) sold in the local market—a measure that would not only help improve the environment-friendliness of diesel but also uplift demand for coconut oil.

The use in Oleochemicals

But most experts agree that there is another viable option that would yield the same favorable result—increased demand from increased use of coconut oil for oleochemicals.

Oleochemicals are chemicals that are comprised of organic oils like coconut oil and palm kernel oil. It is the form that is commonly used as a main component of many important consumer products that are commercially sold in the market.

For instance, coconut oil has almost half of the content of C12 lauric acid (a form of oleochemical), which is the best raw material for manufacturing detergent. In the past decades, palm kernel oil has been the preferred source of C12 lauric acid for such a purpose because it is more easily sourced and is less costly. However, when prices of coconut oil started to drop in January 2018 (to almost equal prices of palm kernel oil) and supply started to get more stable due to favorable climate and recovery of trees from El Nino in 2015, it has become a more ideal component for the oleochemical.

Coconut oil for Manufacturing

Moreover, coconut oil is more scientifically favorable than palm kernel oil, in terms of being used as an oleochemical for various uses. This is among the interesting topics that will be further discussed by IP Specialties President and former Procter & Gamble USA Head Norman Ellard in the upcoming 2nd World Coconut Congress.

The 2nd World Coconut Congress Conference and Exhibition will be held from August 27 to 29 at the SMX Convention Center in Pasay City. It will gather a number of experts and major players from various industries, which are involved in the production and use of coconut products, like coconut oil.

For inquiries, call the United Coconut Associations of the Philippines at +632 584 5338 

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