DAVAO CITY (MindaNews/12 December) – Coconut-based processors in the Davao Region need to tap other sources of raw materials, including Indonesia, to meet the tight demand caused by the growing number of entrepreneurs, an official of the Department of Trade and Industry (DTI)-11 said.
During the DTI-11 Annual Media Interface on Tuesday at the Pinnacle Hotel and Suites here, DTI-11 regional director Maria Belenda Q. Ambi said regional coconut production could no longer meet the demand of a tighter market competition.
“In terms of coconut raw materials, we have a lot of processing establishments here in coconut. Our supply is no longer enough in Davao Region to sustain the operations,” she said.
She said many of the coconut processors, in particular those making coconut oil, are also expanding their operations, due to higher global demand.
She said they plan to take advantage of the Davao City-General Santos-Bitung, Indonesia sea route that was launched last April 30 in the city.
She cited Mindanao is closer to Indonesia, which is currently the largest coconut producer in the world.
Even if local processors would import raw nuts from Indonesia, Ambi said they can still earn higher income because they are into value-adding.
“It’s a win-win situation for us,” she said.
Based on data from the Philippine Statistics Authority, Mindanao’s coconut production in 2016 only reached only 8.3 million metric tons. Davao Region had the highest production with 1.89 million MT, followed by Northern Mindanao with 1.8 million MT, Zamboanga Peninsula with 1.52 million MT, Autonomous Region in Muslim Mindanao with 1.3 MT, and Cotabato Region with 958,350 MT.
Davao Region Industry Cluster Inc. chair Tata M. Fernandez said Mindanao faces a 3-million MT coconut deficit a year that many of the local processors source out from Visayas to fill the supply gap.
Fernandez said the deficit is caused by a stagnant production vis-à-vis a demand that grows between 3 percent and 5 percent a year.
He said if the deficit continues, it will cripple the growth of the coconut industry.
Romeo L. Castañaga, provincial director of DTI-Davao del Norte who is also country head of Brunei, Indonesia, Malaysia, Philippines-East ASEAN Growth Area SME working group, said shipping companies have already signified an interest to deploy smaller vessels to the newly-opened sea route.
He identified these companies as the Zamboanga City-based Aleson Shipping Lines Inc. and Cebu-based Asian Marine Transport Group which owned the 500-TEU (twenty-foot equivalent unit) M/V Super Shuttle RORO 12 that was used during the April 30 launch.
However, the M/V Super Shuttle RORO 12 did not sustain its operations while the Gensan loop was temporarily suspended due to insufficient load factor.
But the bigger vessel was already replaced by a smaller vessel, KM Gloria 28, with a 256-TEU capacity, owned by an Indonesian company, shipping directly from Davao to Bitung since October 2017, six months after the route was launched.
Castañaga said the 41-year old Aleson relayed its experience when it was just beginning to serve the route between Zamboanga Port and Sandakan port, Malaysia in 1994.
He said the shipping company suffered from insufficient load factor but the volume picked up later on. Its pioneering vessel that served the route was MV Danica Joy 1.
According to the firm’s website, the new route “made improvement in terms of goods mobility and comfortability and convenience among passengers.”
At present, Aleson operates a fleet of 25 vessels and has become the dominant shipping operator in Western Mindanao.
According to the Preliminary Annual Report of DTI released on Tuesday, Indonesia is the Philippines’ top 2 import origin, second only to China. (Antonio L. Colina IV/MindaNews)