FOR the nth time since 1974, the Philippine government is talking about energy self-reliance via the production and greater utilization of biofuels.
Talk is not difficult, but implementing much-talked-about programs is.
Aren’t there some 347 million coconut trees yielding more than 15 billion nuts a year from which we might derive coconut methyl ester to blend with diesel in ever increased ratios and even produce aviation fuel like our twin archipelagic sister Indonesia is now doing?
This month, fuel surcharges on domestic passenger flights more than doubled. As the world faced the greatest global energy security threat in history so far, the Philippines immediately felt the full weight of its decades-long dependence on imported fuels.
How many times did we say we would, but never did get around to seriously developing and producing sustainable aviation fuel, or SAF?
In the meantime, a war in the Middle East is happening again, but this time it led to the closure of the Strait of Hormuz, which is crucial for Southeast Asian coconut supply-chain economics.
This closure has led to increased war-risk surcharges and diversions, causing delays in ocean freight and affecting the supply chain.
It has also led to a rise in bunker and fuel prices, impacting the cost of cold-chain, packaging, and mill operations.
Of the twin coconut-producing sisters, Indonesia and the Philippines, the former is clearly the smarter one. It had much earlier expanded its biodiesel blending program to B50, while the Philippines could hardly get out of B3 into B5.
Aside from the war-driven freight and input-cost environment, there is still the earlier factor of the United States’ tariffs imposed on Philippine goods. The 17- to 19-percent US reciprocal tariff on our goods, effective April 10, continues to pressure the 25- to 30-percent of Philippine coconut volume shipped to North America.
Negotiations on relief for the coconut or banana chip categories have so far produced only marginal adjustments.
It is all these developments together that are expected to influence the overall supply and pricing of coconut copra and related products in the coming months.
The Confederation of Coconut Farmers’ Organizations, or Confed, reiterates its advice: increase domestic utilization of coconut and its many products. It must compete with the world in using its own coconuts.
Charles R. Avila
Chairman and CEO
Confed