Coconut Production and Sales Viability in the Philippines
This paper examines the viability of coconut production and sales in the Philippines, one of the world's leading coconut exporters. It reviews global trade patterns for coconut oil, copra, and desiccated coconuts, as well as domestic demand and supply dynamics. The paper analyzes marketing practices and the key players in coconut market chains, highlighting the economic disadvantages faced by smallholder farmers. It also evaluates the business viability of starting a coconut farm, comparing mono-cropping and intercropping strategies, discussing suitable farming systems, and presenting projected returns on investment for a specific locality in Camarines Sur, Region 5.
- Global Trade and the Philippines as a World-Leading Coconut Producer: Philippines' dominant role in world coconut exports
- Demand, Supply, and Coconut Products: Global demand drivers and coconut product range
- Marketing Practices in the Coconut Industry: Supply chain flow and government support roles
- Key Players and Prices in the Market Chain: Farmer disadvantage and poverty in market chains
- Viability of Starting a Coconut Production Business: Income projections and mono-cropping vs intercropping
- Farming Systems, Intercropping, and Location Suitability: Regional suitability and startup costs in Camarines Sur
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What makes this paper effective
- Grounds its analysis in specific quantitative data — export percentages, peso-denominated income projections, and hectare-level yield figures — giving the business viability argument concrete credibility.
- Moves logically from macro-level global trade context down to a specific locality (Butawanan, Siruma, Camarines Sur), narrowing scope progressively and making the conclusion feel well-supported.
- Balances multiple dimensions of feasibility — ecological, agronomic, and socio-economic — demonstrating awareness that farm viability depends on more than just market prices.
Key academic technique demonstrated
The paper effectively uses layered sourcing: it combines international commodity data (UNCTAD), government agricultural research (Magat, PCA), peer-reviewed journal findings (Pabuayon et al.), and practitioner interviews to build a multi-perspective feasibility argument. This technique strengthens credibility by triangulating evidence across institutional, empirical, and local sources.
Structure breakdown
The paper opens with global export context, then narrows to domestic demand and marketing practices before analyzing the market chain's value distribution among players. The final sections pivot to practical business planning — comparing cropping strategies, citing regional suitability classifications, and projecting year-by-year returns on a one-hectare farm. This macro-to-micro structure is well-suited to feasibility or industry analysis papers.
Global Trade and the Philippines as a World-Leading Coconut Producer
Coconuts are grown and sold mostly as copra and in fresh form (UNCTAD 2009). Most large coconut producers process their own copra and extract oil in their own mills. Of the total exports derived from coconuts, copra accounts for only 4%, while the remainder is coconut oil. There has been strong global demand for coconut oil exports over the past two decades, driven largely by its high lauric fatty acid content. Only a little more than 2 million tons were supplied to the world market in 2008. In that year, the Philippines supplied the most at 42%, exporting primarily to the United States and Europe, which accounted for 24% and 25% of their respective imports. International organizations provide preferential tariffs and price support for these imports from the Pacific region in order to encourage trade.
Approximately 279,000 tons of desiccated coconuts were traded worldwide in the same year, with 34% originating from the Philippines, Sri Lanka, and Indonesia. Desiccated coconuts are highly valued and command a higher price than copra or coconut oil (UNCTAD).
Demand, Supply, and Coconut Products
World demand for coconut oil remains high because of its high lauric fatty acid content, which is particularly useful to the detergent and cosmetic industries (Docstoc 2013). The coconut is processed into coconut oil, desiccated coconut, fresh coconut, and copra. By-products include copra meal, activated carbon, coconut shell charcoal, coconut coir, and coir dust. End-products include detergents, soaps, shampoo, cosmetics, margarine, cooking oil, sweets and sweeteners, vinegar, and nata de coco. The coconut is also processed into intermediates such as oleochemicals, including fatty acids and fatty alcohols (Docstoc).
Only about 20% of overall country production goes to the local market (Docstoc 2013). In addition to traditional products, virgin coconut oil (VCO) continues to be in demand domestically for health promotion. Some small and medium-sized enterprises have formed to produce and export VCO, making it a cottage industry that requires a minimum capitalization of ₱2 million. Mindanao has increased its total land area planted to coconut in order to raise production to 1.4 million metric tons of copra (Docstoc).
Marketing Practices in the Coconut Industry
Most copra is first sold to village buyers before it reaches the oil mills (Docstoc 2013). World prices of coconut oil and domestic conditions largely determine copra prices. The supply chain begins on the farms, which produce coconut products after the nuts are harvested (Magat 1999). These nuts and other coconut parts are processed using various machinery, equipment, and technologies to manufacture primary products such as copra, oil, copra meal, fiber, coco dust, sap, coco water, charcoal, and coco wood. These are then converted into marketable forms for trade and sale. The Philippine Coconut Authority and the broader Philippine government extend research and extension services to improve and increase products and their quality through credit, farm inputs, and other forms of assistance to small and medium-sized farmers and processors (Magat).
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