DTI-EMB conducts DBFTA session during 1st International Coconut Conference in Davao
Business Mirror
August 16, 2016

THE First International Coconut Conference (ICC) held in Davao City on July 27 and 28 provided a venue for the Department of Trade and Industry’s (DTI) Export Marketing Bureau (EMB) to hold a seminar on its major program, called Doing Business in Free-Trade Areas (DBFTA) to more than 500 coconut-industry representatives.

The seminar sought to motivate coconut producers to export more products to destinations where the Philippines has free-trade agreements (FTA) in order to maximize the benefits and privileges these agreements offer.

The DBFTA is one of the EMB’s major programs where information on trade negotiations and agreements are discussed and explained.

The Davao session highlighted the benefits offered by European Union Generalized System of Preferences Plus (EU-GSP+), a preferential  tariff scheme granted by the EU to developing countries that meet very stringent application requirements. The Philippines, currently the only country in the Asean to be accepted in the scheme, applied for the scheme two years ago and was accepted formally into the EU-GSP+ program on December 18, 2014.

EMB Director Senen M. Perlada said Philippine producers can now export more than 6,000 products to any of the EU’s 28 member-countries at zero tariffs using the GSP+. Products that may have duty-free access include coconut and marine products, processed fruit, prepared food, animal and vegetable fats and oils, textiles, garments, headwear, footwear, furniture, umbrellas and chemicals.

Perlada quoted former General Electric CEO Jack Welch, “The winning corporations will be able to find success or their success will be judged by their international market share.”  He added there is no need for the Philippines to isolate its economy to the rest of the world because “the world is just too big to ignore even as a market or as a competitor.”

Yvonne CV Agustin, executive Director of the United Coconut Associations of the Phippines (Ucap), said there are enormous prospects in Europe for coconut water. The Philippines exported more than 29 million liters of coconut water last year, a big leap from 100,000 liters exported 10 years ago.

Agustin said demand for coconut beverage or coconut water remains very high because consumer preference tends to favor simple beverages with all-natural ingredients, free from preservatives or additives and gluten, as compared to others which have a long list of components. She said consumers look for health benefits, such as organically produced, low in calories, fat, sodium and sugar, but containing electrolytes.

Agustin said the beverage sector will continue to derive things from health positioning, which has always been the selling point of coconut water and  the very reason it gained acceptance from consumers worldwide.

“Despite carrying a price tag of around $1 per liter, coconut water remains the beverage to beat in the export market, with flavored coconut water [chocolate, coffee, pineapple and omega-infused] slowly penetrating nontraditional markets,” she said.

On another note, greater demand is also seen for virgin coconut oil (VCO) products.

In a presentation, Cesar Galvez, VP for Operations of Franklin Baker (FB), said VCO is the fastest-growing coconut export product. He said that, based on global trends, there is increased demand for certified processed-coconut food products. He emphasized the need to develop ethnic cuisines and cultures by way of SOLE food: sustainable, organized, local and ethical products.

Galvez said FB has started working directly with small coconut farmers through certification programs, like organic certification and fair trade. With this endeavor, he said FB ensures the premiums they put on the nuts go directly to farmers.  This is part of the company’s recognition of farmers as the backbone of their business.

“That means, we recognize the need for payback; to return to the farmers what is due to them,” he said.

The session included a lecture on “Product Breakthroughs and New Applications of Virgin Coconut Oil in Nontraditional Markets” given by Dr. Tony Mix, chairman of Natures Clinic. Dr. Mix is a naturopathic practitioner and a VCO advocate. Dr. Mix said VCO contains lauric acid and another fatty ingredient called capric acid. Capric and lauric acids enhance the ability of the pancreas to secrete insulin, he said.

Dr. Mix said, “This is great news for many diabetics dependent on daily insulin injections, as coconut oil can help cut down, if not eliminate, their reliance on insulin.”

Dr. Mix has a clinic in Quezon City.

A presentation was also made by a foreign buyer from Japan, Takeshi Minadani, an executive of Coconut Japan, who gave information about the current demand of Japan on coconut-food products. Minadani said Japan needs around $140 million to $190 million worth of coconut oil annually.  There is also demand for coconut sugar, coconut water and extravirgin coconut oil. Japan currently buys coconut products from Sri Lanka, India, Vietnam, Thailand, Indonesia and the Philippines.

Minadani said Japan is also an important market for coconut-shell charcoal and activated carbon (AC) used to remove pollutants, contaminants and other impurities from water, air and food, such as beverages and  pharmaceuticals.

Other major markets for coconut-shell products are Korea and Taiwan.

At present, aside from its FTA with the nine member-states of Asean, the Philippines is also a signatory to Asean’s FTA with China, Japan, South Korea, India, Australia and New Zealand.

The country also has a bilateral agreement with Japan and recently signed an FTA with the European Free Trade Association, composed of Iceland, Liechtenstein, Norway and Switzerland. This agreement is still undergoing ratification.□

Ma. Melvin Joves, Product Officer, Coconut Sector, Food and Agri-Marine Division, Export Marketing Bureau, Department of Trade and Industry

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