Bloomberg News

Coconut Crisis Looms as Postwar Palm Trees Age: Southeast Asia

November 04, 2013

Coconut plantation in the Philippines

A worker collects coconuts from the top of a tree at a coconut plantation outside Legazpi City in Bicol, the Philippines. Photographer: Paul Hilton/Bloomberg

Asia’s coconut palms, which mark the landscape from the Philippines to India, face a crisis as aging groves become less productive, with harvests that are a source of food and income for millions being outstripped by demand.

The trees, many of which were planted about 50 to 60 years ago, no longer yield enough to meet rising demand, according to the Rome-based Food & Agriculture Organization. There’s an urgent need for replanting, said Hiroyuki Konuma, regional representative for Asia and the Pacific at the UN agency, which is coordinating a response to the challenge. While world consumption of coconut products is growing more than 10 percent a year, production is increasing by only 2 percent, it said.

At stake is the productivity of a core part of the rural economy in the Asia-Pacific, which accounts for about 85 percent of the global supply of the commodity that goes into food, fuel, soaps and cosmetics. In the Philippines, among the three biggest growers, one in five people depends on the crop to some extent, according to the Asian and Pacific Coconut Community. The Jakarta-based group, which represents growers, predicts that harvests could be increased to benefit millions of smallholders.

“We have a lot of aging trees,” Yvonne Agustin, executive director of the United Coconut Association of the Philippines, said in an interview, adding some local palms are already 100 years old. “The government recognizes that and has embarked on a planting and replanting program,” Agustin said by phone.

Slender Trees

The slender trees that are a staple image for tourists’ postcards are productive for between 50 years and a century, with the highest yields in the first three decades, according to the FAO. The harvest in the Asia-Pacific is now about 40 nuts per tree a year, compared with a potential yield of 75 to 150, it estimates, saying replanting is advisable after 60 years.

India, Asia’s third-largest economy, is the top producer, harvesting 17 billion nuts last year, followed by Indonesia, which gathered 15.4 billion, and the Philippines, with 15.2 billion, according to the Asian and Pacific Coconut Community. The global coconut area was about 12.3 million hectares (30.3 million acres), yielding 64.3 billion nuts, it said.

While the expansion of services and manufacturing spurs economic growth in Asia, farming remains important. In India, agriculture accounted for 17 percent of gross domestic product last year, according to the Washington-based World Bank. In Indonesia, agriculture was 15 percent of GDP in 2011, while in the Philippines it was 13 percent. The FAO estimates the coconut industry accounts for as much as 5 percent of Philippine GDP.

Philippine Yield

In the Philippines, an estimated 340 million trees cover 26 percent of farmland, yielding 43 nuts per tree a year, data from the Philippine Coconut Authority show. Shipments of coconut products in the first eight months of the year rose 10 percent to $1 billion, data from the statistics agency show. The industry is the country’s largest agricultural exporter, said Euclides Forbes, the authority’s administrator.

Kerala is the top producer in India, followed by Tamil Nadu, Karnataka and Andhra Pradesh, according to the Coconut Development Board, under the Ministry of Agriculture. While a trial program in Kerala to replace aged palms has boosted productivity, yields are still dropping in the three other states, sometimes by as much as third, Sugata Ghose, the board’s chief coconut development officer, said in an interview.

“We have removed disease-ridden and old palms for replanting,” said Ghose, who’s based in Kochi, Kerala. “Last year, we had a big problem with the price, as farmers were not getting a good price. This year farmers are happy because production is less plus demand has gone up.”

Bangkok Consultation

Not all farmers face difficulties. Aging trees aren’t an issue in Vietnam’s Ben Tre, according to Tran Van Hung, deputy director of the agriculture department in the province that’s the biggest grower. Yields are stable at about 100 nuts per tree a year in most areas, up from about 60 a few years ago after prices rose and farmers used more fertilizer, Hung said.

The FAO, a United Nations agency, hosted a consultation in Bangkok last week to address the yield issue, drawing representatives from states including the three top growers as well as Fiji and the Solomon Islands. While yields are low and most trees are old, scientists are working to raise output, said Siriwat Kajornprasart, Thailand’s deputy minister of agriculture and cooperatives.

“Coconut is a traditional crop in India, with more than 2,000 years of history,” K. Muralidharan, director of the Coconut Development Board, said on the sidelines of the gathering in Bangkok. Every part of the palm can be used, and the industry contributes more than 83 billion rupees ($1.3 billion) a year to India’s GDP (INQGGDPY), he said.

‘Often Overlooked’

New trees can start producing in as few as two or three years, according to Romulo Arancon, executive director of the Asian and Pacific Coconut Community. With replanting and improved farm practices, output can be raised by 50 percent to 100 percent within a few years, said Arancon, who estimated that a mature palm can produce as many as 400 nuts a year.

More than half of Indonesia’s 4 million hectares of palms are aging, or over 50 years old, said Irawadi Jamaran, chairman of the Indonesian Coconut Board, which groups producers, processors and sellers. The main problem for the industry is a lack of government attention, with greater concern for bigger plantations, especially oil palm, Irawadi said. The country is the largest producer of palm oil, which is grown on estates.

“Coconut is often overlooked by many people because we’re always looking at rice and oil palm, and people don’t think coconut is an important one: this is not true,” the FAO’s Konuma said in an interview. “It contributes to economy, culture and livelihood.”

To contact the reporter on this story: Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

To contact the editor responsible for this story: James Poole at jpoole4@bloomberg.net


Best LBO Ever
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus