MANILA, 9/11/2001 (Financial Times) - Philippine coconut oil exports aresoaring, but that is hardly cheering the south-east Asian nation's 3.4mcoconut farmers, who make up one-third of the agricultural labour force.Overseas sales of Philippine coconut oil rose 60 per cent to 916,546tonnes in the eight months to August, compared with the same period of theprevious year.This was the result of good weather in the country's main nut producingregions, according to a private industry group. The official August exportfigures will be published next month.Abundant rainfall and the absence of typhoons boosted the production ofcopra, the dried coconut meat from which oil is extracted, according toAnton Padua, a trader at San Miguel's Iligan coconut oil milling plant,the country's fifth largest.However, higher coconut oil exports have not translated into higherincomes for coconut farmers, as international prices have been dropping torecord lows.In fact, traders say that surging Philippine exports, along with recordinventories of Malaysian palm oil stocks, have helped to keep down worldcoconut oil prices.The average Philippine coconut oil export price fell to a 15-year low ofDollars 283 a tonne in March. It recovered to Dollars 353 in July, butthat is still about 11 per cent below last year's levels. Traders say thecommodity was recently traded at between Dollars 332.50 and Dollars 390 inthe European market.The Philippines is the world's leading exporter of coconut oil, accountingfor 64 per cent of international supply. It shipped more than 1.6m tonnesof coconut oil last year, more than double the previous year's level.The United Coconut Association of the Philippines, a group of coconutmillers, refiners and traders, forecast coconut oil exports would reach2.03m tonnes this year.Farmers, however, have yet to harvest their windfall. Lower coconut pricespushed down farmers' incomes by 42 per cent in the first half of 2001,even as nut production went up 3.1 per cent. Last year, coconut producers'incomes fell 37 per cent as coconut output rose by 14 per cent."They have to produce more just to earn the same level of income," saysLuz Lorenzo, chief economist at ATR Kim Eng Securities.The government wants to develop the domestic oleochemicals industry toreduce the coconut sector's excessive dependence on coconut oil exports.Coconut oil makes up more than 90 per cent of Philippine coconut-relatedoverseas sales, while fatty acids, methyl esters and fatty alcoholsaccount for only 2.3 per cent.