While most people associate coconuts with traditional raw materials and minimally processed products like cooking oil, Filipino entrepreneurs, farmers, and agricultural technologists have, in recent years, made numerous key innovations that are managing to subvert expectations about the Philippine coconut industry and take it to global relevance.
It seems that there’s no better time than now to explore the benefits of engaging with a coconut business or even starting one’s own venture. In this feature, we’ll take a look at recent developments in the coconut industry and what they mean for Filipino coconut farmers and entrepreneurs.
Promising New Developments in the Coconut Sector
Consumers around the world are becoming increasingly aware of the incredible versatility of the coconut plant—and, in particular, of the wealth of health and nutritional benefits the coconut fruit and its derivatives offer. As a result, the global market values of coconut-derived products like virgin coconut oil (VCO), coconut milk, and coconut water have been growing consistently since 2014.
This awareness has also led to further interest in the potential of coconut-derived ingredients in areas other than food and personal care. Coconut-based ingredients are now increasingly being explored as a sustainable alternative to petroleum-derived products in a variety of home and industrial applications.
For instance, refined, bleached, and deodorized (RBD) coconut oil is now being used in a variety of industrial lubricants and cleaners. Coconut-derived ingredients such as cocamide methyl MEA, amides, and cocodiethanolamide are now also becoming popular as non-ionic surfactants for home and industrial use. Products made with coconut-derived ingredients are also making waves in the motor care market as environmentally sustainable alternatives to products based on petroleum and synthetic chemicals.
Experts believe that this burgeoning consumer interest in newer coconut-based products has the potential to revitalize the Philippine coconut industry, which has historically relied on the production of more traditional agricultural offerings like copra.
How Will the Philippine Coconut Industry Benefit?
Coconut producers, entrepreneurs, and farmers stand to gain much from an overall pivot to the trading of value-added coconut-derived oleochemicals. This is largely thanks to a shift in global consumer preferences toward eco-friendly, sustainably sourced products.
Coconut crops grow well in a wide range of soils and can be cultivated comfortably alongside other crops. These factors help minimize coconut plantations’ intrusion into the surrounding environment and help mitigate deforestation and biodiversity loss. Coconut fruits are also usually harvested by hand, which cuts out the need for tractors and other fuel-intensive machinery.
A continued focus on sustainable planting, harvesting, and trading may eventually position products made with Philippine coconuts as environmentally and socially-conscious alternatives to those derived from petroleum, synthetic chemicals, and the African oil palm. This approach may potentially benefit not just the Philippine coconut industry but also local growers of other agricultural exports.
What Needs to Happen?
Naturally, government support in the form of training, subsidies, R&D, and other measures is necessary to achieve inclusive growth for the local coconut industry. The faithful implementation of the Coconut Farmers and Industry Development Plan (CFIDP), a plan approved by then-president Rodrigo Duterte in June 2022, is an important step in this direction. The CFIDP outlines steps for the release and utilization of a PHP 75 billion fund allocated for the coconut industry in Republic Act (RA) 11524, known as the “Coconut Farmers and Industry Fund Act.” Over the next five years, this guaranteed funding is to be used for the following purposes, among others:
- Replacing aging, low-yielding coconut trees with higher-yielding hybrids
- Rolling out the embryogenetic technology required for cultivating hybrid coconut seedlings at a commercial scale
- Educating local farmers on current agricultural and marketing best practices
- Establishing coconut processing facilities
A Quick Look into the Coconut Industry’s Current State
While the Philippines has long lost its place as the world’s biggest coconut exporter, it remains one of the world’s major producers and exporters of the crop. In 2019, the Philippines was ranked behind only Indonesia as the second largest source of coconuts in the world.
The size of the coconut industry in the Philippines means that the sector provides livelihood opportunities for up to a third of the country’s total population. According to information from the Philippine Coconut Authority (PCA), about 25 million Filipinos depend either directly or indirectly on the coconut industry for income, a figure which includes the country’s 3.5 million coconut farmers.
Copra, or dried coconut meat kernel, has historically been the Philippines’ primary coconut-based export. Over the years, however, local coconut producers have sought to maximize the value of their crop by researching and developing other potentially profitable coconut products and byproducts.
The sustainable cultivation, manufacturing, and sale of novel high-value coconut products are entirely possible with the sustained collaboration of the public and private sectors. It’s also imperative for coconut producers to continually educate themselves on modern farming and marketing procedures, invest in emergent technologies, and explore productive business partnerships. These measures won’t just keep the coconut industry eco-friendly but also drive its profitability for years to come.
By focusing on the production of new value-added products for industries other than food and personal care, the Philippine coconut industry can potentially leverage its size to become a globally-relevant supplier of socially-conscious and sustainably-sourced chemical ingredients. The potential benefits for Filipino farmers and others involved in the industry could be immense.
This is especially critical given the rising demand for sustainable products overseas. By following a strategy that emphasizes the export of value-added products rather than raw materials, the country may become a true leader and innovator not just in coconuts but in sustainable ingredients as a whole, creating products that make a difference in every aspect of our modern lives.