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Barun Roy: A new coconut order

Source : BUSINESS_STANDARD
Last Updated: Wed, May 02, 2012 19:42 hrs

One of my earliest discoveries in the Philippines, when I first went there in the mid-Seventies, was “buko” pie. “Buko” is the Tagalog word for coconut and the pie is made of tender coconut meat. My wife and I often drove to Los Banos, a salubrious little town some 60 kilometres from Manila, at the foothills of Mt Makiling, to see friends on weekends; and even before we got there we’d be besieged by young boys and girls, laden with boxes of pies, begging us to buy one. We would, and on the way back we’d stop to savour more, fresh off the oven, at one of the many “buko” pie parlours that lined the highway.

I loved “buko” pie, its crunchy crust and pulpy filling, and I wasn’t the only one. Thousands of others, foreigners in particular, had developed a liking for this typically Filipino delicacy and helped build a thriving cottage industry around it. But, in those days, that was more or less the extent of value addition that Filipinos could think of to one of their most abundant natural products, the coconut, other than extracting sap from the flowering stem of the coconut tree to produce a toddy drink called tuba that poor Filipinos liked to booze on.

Traditionally, coconut farmers in the Philippines have raised their trees with only one thing in mind, to produce copra, of which the country is the world’s largest exporter. It’s a big industry, with 3.1 million hectares, one-fourth of the Philippines’ entire farmland, under coconut, 324 million trees on the ground, and some 25 million people depending on it for their livelihood; but, of the 15 billion or so nuts harvested yearly, 90 per cent are dedicated to copra, dried coconut kernel that’s processed into oil for use in explosives, detergents and soaps.

Now, Filipinos are having doubts if they aren’t losing out by sticking with their old, one-product business pattern. For one thing, competition from other nations, especially Indonesia and Thailand, is growing. For another, new coconut products are coming on the market that could be even more profitable than copra, which may be why even a non-coconut country like Brazil, traditionally an orange producer, is engaged in a massive coconut plantation programme. If the Philippines is to maintain its coconut lead overall and raise its current coconut income of $760 million a year, which isn’t bad but not good enough, it must try and sell these other products as well, for which global demand has suddenly begun to grow very fast.

Like packaged coconut water. The world suddenly seems to have discovered that natural coconut water, rich in minerals and potassium, is a better substitute for cola and energy drinks, and health buffs and sportspersons in the US and Europe are sipping it up in large quantities. The trend is picking up in China, too, and in Brazil, reputedly the world’s largest packaged coconut water market. Analysts say global demand for coconut water is now about 100 million litres a year and the Philippines alone, if it so desired, could supply all of it. If all the nuts it now uses to produce copra, 12 billion or so, were to be diverted to producing water, it could produce 4 billion litres of it annually.

Or coconut sap sugar. Filipinos are saying it could be their next billion-dollar export industry, bigger than copra. Coconut sugar is claimed to be high in minerals, is a rich source of potassium, magnesium, zinc, iron, and vitamins B1, 2, 3 and 6, and has a low glycemic index, 35, that makes it an ideal sweetener for diabetics and weight watchers.

Then there are coconut soy, an all-purpose sauce, and coconut milk, said to be better than dairy and ideal for those who are lactose-intolerant, as many Asians are. It’s not surprising, therefore, that Manila should now be aiming to cash in on the new market potential and bring about a new coconut order that won’t be too copra-dependent. President Benigno Aquino III has said “buko” water alone could save the Philippines’ impoverished coconut farmers, and the Philippine Coconut Authority has allocated funds to develop an integrated coconut production and processing programme and raise production standards. A conference was held recently in Davao City, where coconut sap sugar, in the market since 2007, was the focus of attention.

A lot would now depend on what happens to the coconut trust funds built out of coconut levies imposed by former President Marcos through executive orders. The Philippine Supreme Court has now declared those orders illegal, and if, as a result, these sequestered private funds, running into billions of pesos, are released, the Philippines will be in a good position to reinvent its ageing coconut industry and explore the wider world of new opportunities that lies beyond copra and “buko” pie.


rbarun@gmail.com  



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