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Coffee export value dips.

Coffee export value dips

The Philippines exported a total of 28,913 metric tons of coffee valued at $50.5 million from October 1988 to September 1989.

The amount was .085 percent lower than that of the previous coffee year's export value of $50.565 million. The total volume, however, represented an increase of 9.5 percent over that of the previous year's 25,000 metric tons.

About 98 percent of the total Philippine coffee exports went to ICO member-countries, with the U.S. and Singapore contributing $38 million of the total value. The rest was shipped to non-ICO member-countries, led by the Sultanate of Oman, which alone purchased 453 MT valued at $970,000.

The Philippines was able to post this total record despite depressed prices in the world market by utilizing its quota per quarter in advance, according to Antonio Reyes, executive director of the local ICO Certifying Agency under the Department of Trade and Industry.

Prices went down gradually, from $2,000 per MT during the first quarter of the coffee year, through $1,800 during the second quarter, to less than $1,000 in the fourth quarter.

As a result of this strategy, the Philippines was able to earn $251,000 more than the expected normal exportation procedure.

Director Reyes said the ICO-CA also extended help to local coffee exporters, when the world quota was suspended as a result of the breakdown in ICO negotiations, by suspending certain requirements to enable them to compete with other countries producing Robusta.

The country's quota for the period was reduced from 27,925 MT to 24,313 MT following the reduction in the global annual quota.

Coffee Demand Low

In view of the oversupply of coffee in the world market, estimated at 100 million bags, only about 66 million bags are expected to be in demand.

Reyes said the Philippines might expect to export only $28 million worth of the commodity this current coffee year. Domestic prices will be expected to compete with export prices. This situation is expected to spur Filipino coffee exporters to sell more. Processed coffee exports are estimated to increase this year to about $1 million, or twice that of last year's total value. Exporters are expected to maximize sale to other countries, i.e. Australia, where the commodity is blended with domestic varieties for export.

The certifying agency, in coordination with the Department of Agriculture, and coffee producers, will push the rejuvenation and replanting of coffee within the next two years, and the shift from Robusta to Arabica.

Meanwhile, coffee, which is now included in the country's futures market, is expected to fetch an average of $1.133 per kilo, from April to September 1990. This price is 62 cents less than last year's export value of $1.75 per kilo.

In another development, the local ICO Certifying Agency has warned domestic shipping companies that their plan to increase freight rates and passenger fares would adversely affect the local coffee industry.

The shipping firms have petitioned the government for a five percent increase in freight rates and 10 percent in passenger fares to offset costs of fuel and other items.

If the proposals are approved, coffee farmers in the Visayas and Mindanao - where about 60 percent of the beans are produced - would have to shoulder the increased costs.
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Title Annotation:Philippines
Author:Palacpac, Orlino Sol.
Publication:Tea & Coffee Trade Journal
Date:Apr 1, 1990
Words:554
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