30/11/05 (Philippine Daily Inquirer)  -  Brighter prospects are on hand for Philippine coconut producers and millers as local manufacturers expand operations and a new biodiesel plant comes on-stream next year.

In fact, both the Philippine Coconut Oil Producers Association Inc. (PCOPA) and the United Coconut Association of the Philippines Inc. (Ucap) are bullish that higher local demand will boost the industry's growth in 2006.

"Leading shampoo and soap manufacturer Pilipinas Kao Corp. plans to expand their manufacturing capacity from the current 40,000 metric tons to 100,000 metric tons next year," PCOPA president Raul Ostrea told the Inquirer. "This will be beneficial for us."

Aside from its nutritional value, coconut oil is a leading oleochemical used to manufacture bath soap, shampoo and detergents.

Another development in 2006, according to Ostrea, would be the commercial production of the first methyl esther plant of Chemrez Inc. manufacturing coconut-based bio-diesel.

In terms of coconut oil exports, the country's participation in the Early Harvest Program with China will also bode well for the country's producers because it has a geographical advantage over competitor Indonesia.

"We hope that the tariffs slapped by Chinese authorities on our exports will be reduced to zero from the current 10 percent," he added.

He noted that forthcoming higher demand will be met with the expected good coconut oil production levels aided by good weather in the third and fourth quarters of this year.

Ostrea said the coconut industry is bouncing back in the second semester having so far exported close to 1.1 million metric tons of coconut oil to the world market, and already exceeding its target of shipping 950,000 metric tons by year-end.

This is 16 percent higher compared to 2004 levels when the country shipped 952,000 metric tons of coconut oil to traditional markets like the US and European Union.

Local production

The country's coconut oil industry has been hounded by production declines since the Philippine Coconut Authority has no budget to implement the fertilization project it had planned for the next two years.

According to data from PCA, production may double to 4 million metric tons of copra-almost double from last year's output-if this fertilization program is pursued.