13/2/06 (Philippine Daily Inquirer) - Coconut oil production is expected to decline by 4 percent this year due to the lingering effects of the mild drought last year.

Philippine Coconut Authority administrator Jesus Emmanuel Paras told the Inquirer in an interview that the initial forecast placed total coconut oil production this year at 2.5 million metric tons.

The level of exports, Paras added, was likely to remain at around 1.1 million tons this year.

This figure is still enough to make the Philippines the world's biggest exporter of coconut oil.

Paras said the countrys coconut oil industry has been hounded by production declines since the PCA has no budget to implement the fertilization project it had planned as early as two years ago.

According to data from PCA, production could have doubled to about 4 million metric tons of copra if the planned fertilization program pushed through.

Despite this, coconut oil exports rose 15.8 percent in 2005 to an estimated 1.11 million tons, beating the forecast of 930,000 tons set by the United Coconut Associations of the Philippines and the governments estimate of 980,000 tons for the year.

Production of copra, the raw material from which coconut oil is extracted, climbed 9.88 percent in 2005 from 2004 to 2.612 million tons, data from the PCA showed.

Copra output, however, is expected to fall 5.3 percent to 2.46 million tons this year.

Most of the countrys coconut oil output is used in the manufacture of aviation lubricants, cosmetics, soap and margarine.

The bulk of coconut oil exports went to Europe and the United States, Korea, Malaysia and Japan.

In the case of copra meal, the Philippine exports went to Korea, which has been a leading destination for the product since 2000.