Philippines Coffee Prospects

Thursday, July 06, 2006

Coffee Industry Situationer Report

Introduction

  • Coffee refers to both the beans or seeds contained in the cherry-like fruit of an evergreen tree indigenous to tropical Africa, as well as the beverage prepared from these seeds by infusion or decoction after they are roasted and ground.
  • The Philippines produces mainly Robusta coffee and is one of the few countries where all four varieties of coffee are grown on a commercial scale.
  • Most of the Robusta produced in the Philippines are dried under the sun before they are milled. The cup produced is slightly bitter with pronounced flavor. Philippine Arabica being produced is with pronounced fermented character. On the other hand, Philippine Excelsa is processed under the natural method and produces an aroma similar to that of Arabica. It is usually used to a high degree in blends of roasted ground coffee. The Liberica variety, popularly known as "kapeng barako" bears the biggest fruit among these varieties. It is characterized by a very strong pharmacopical taste and flavor.
  • Coffee was introduced in the Philippines in 1740 during the Spanish rule. It was first planted in Lipa, Batangas.

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Production

    Volume

  • Coffee production is largely concentrated in Mindanao. In 1998, about 71% or 86,649 mt of the country's coffee output comes from this island. Luzon, on the other hand, contributes 24% or 29,720 mt while the Visayas Region accounts for the remaining 5% or 5,717 mt. On the regional level, the top producing regions are: Southern Mindanao (31.68%) or 38,673 mt,; Northern Mindanao (15.55%) or 18,979 mt; Southern Tagalog (14.05%) or 17,155 mt; ARMM (10.75%) or 13,121 mt and CAR (6%) or 7,451 mt. These five regions contribute for 78.03% or 95,379 mt of the total volume of coffee produce (Table 1).
  • Volume of coffee production in 1992 was recorded at 142,094 mt and dipped to 118,992 mt in 1996. Output in 1997 increased to 130,253 or 9.46% above the previous year's level.
  • Over a six year period (1992-1997), Southern Mindanao consistently leads in the production of coffee beans followed by Southern Tagalog (2nd) and Northern Mindanao (3rd). Preliminary data of 1998, however, showed that Northern Mindanao production exceeded that of the Southern Tagalog output..
  • Area

  • Southern Mindanao, Southern Tagalog, Northern Mindanao, Central Mindanao and ARMM (in that order) are the regions with the largest area devoted to coffee. Collectively these regions contributed 77% (114,281 hectares) of the total area of coffee in 1998 (Table 2).
  • Total area planted to coffee showed a decreasing trend from 148,307 hectares in 1992 to 144,389 in 1995. In 1996 area devoted to coffee increased by 4.7% compared to 1995, however a drop of .73% (150,065) hectares was observed in 1997 and further decreased to 148,405 hectares in 1998.
  • Yield

  • In terms of yield, the Philippines registered an average of 1.23 kg. per tree. Highest yield per tree was recorded at 3.38 kg. in Central Luzon followed by Western Mindanao with 3.21 kg. and ARMM with 1.67 kg. It was observed that Cagayan Valley has the lowest yield at 0.44 kg. per tree (Table 3).

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Trade

    Exports

  • The Philippines exports Robusta, Excelsa, Liberica and Arabica in its raw/green, not roasted, not decaffeinated form. In 1994 and 1995, Robusta accounted for the bulk of exports, recorded at around 3,646 mt (89%) and 1,638 mt (68%), respectively. In value terms, Robusta variety accounted for US$ 7,450,633 (FOB) in 1994 and US$ 4,790,798 (FOB) in 1995 a decrease of around 36%. From among these varieties, Liberica variety dominated the Philippine exports in 1996 and 1997 which registered a total export of about 262 mt (US$ 760,576 (FOB)) and 246 mt (US$ 578,469 (FOB)), respectively. For the year 1998, Liberica variety topped Philippine exports at 299 mt valued at US$ 652,549 (FOB). (Table 4)
  • The Philippines also exports extracts, essences and concentrates of coffee and preparations. From 436 mt in 1994, exports decreased by 16.7% the following year. In value terms, an increase was observed by as much as 23.4% in 1995 compared to 1994. Exports in 1996 and 1997 further increased to 438 mt (US$ 3,223,593) and 540 mt. (US$3,186,485), respectively. In 1998, however export was recorded at 208 mt, a decrease by about 61% from the previous year level.
  • In 1998, Singapore was the major market for the Phil. Robusta. For the Arabica variety, Taiwan (rep. of China) was the largest buyer absorbing 64.40% of total exports. On the other hand, Oman and Singapore are the major destinations for the Philippine Excelsa and Liberica varieties with Oman absorbing the bulk of Philippine exports (Excelsa –61.56%; Liberica - 73%) Table 5.
  • For the same period, Oman is the Philippine sole market for roasted, unground, not decaffeinated coffee absorbing .27 mt valued at US$ 1,539 (FOB). On the other hand, Singapore accounted for around 81% (169 mt) of total exports of the extracts, essences and concentrates of coffee and preparations valued at US$ 1,050,293 (FOB).
  • Philippine coffee exports in 1998 was dominated by raw/green (76%) and extracts, essences and concentrates of coffee and preparations (22%), a combined total of 98%. The remaining 2% was co-shared by roasted unground not decaffeinated coffee (Chart).
  • Imports

  • The Philippine imports coffee in various forms, such as; roasted, raw/green, extracts, essences and concentrates and other forms.
  • In 1994, the country imported .166 mt of roasted coffee (ground, not decaffeinated) from Netherlands valued at US$ 89.698. Importation of this form increased in 1995 to 8.5 mt, 98% higher than the previous year. A slight increase of 16% (8.502 mt) was recorded in 1996. The year 1997 posted the highest import recorded at 292 mt valued at US$ 459,645 (FOB). For the period 1994-1997, importation posted an average annual growth rate of 88% (Table 8).
  • Imports of coffee extracts, essences and other preparations increased from 7 mt in 1994 to 912 mt in 1997, an annual growth rate of 95%. An increase of about 72% was recorded in 1997 compared to 1996 level. In 1997, value of exports was recorded at US$ 2,048,221 (FOB), 25% higher in 1996 value recorded at US$ 1,535,632 (Table 9).
  • In 1998, Indonesia supplied 95.32% of the Philippine requirement for raw/green coffee, Robusta variety. For the same year, total Philippine imports of the Excelsa variety which accounted for 2,839 mt valued at US$206 was all sourced from the USA. (Table 10)
  • Australia in 1998 was the main source of the Philippines' roasted, ground decaffeinated coffee. Moreover, the three major suppliers of roasted, ground not decaffeinated coffee were: USA (39%), Australia (29%) and Italy (19%).
  • For coffee extracts, essences and concentrates, the United States of America, accounted for 394% (217.444 mt) of the total import volume, valued at US$ 389,259 (FOB). Singapore ranked second with 19% share and 12% for Hongkong.
  • Almost all of the Philippine imports in 1998 were in raw/green (not roasted, not decaffeinated) form. It accounted for 95.4% of total imports.

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COMMODITY SUPPLY




COUNTRY INFORMATION OF THE COFFEE INDUSTRY

Production Capacity

1992

1993

1994

1995

1996

Hectares

148,307

146,496

146,369

144,389

151,169

M. Tonnes

142,094

134,184

132,604

133,999

118,992

Yield/Hectare

1.46

1.39

1.38

1.43

1.32

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TRADE STATISTICS



Coffee: Philippine Exports by form and
Country of Destination, 1998

Product Form/Country of Destination

Volume (NK)

Value (FOB-US$)

% Share Volume

Value

1. Raw/green, not roasted, not
decaffeinated

711,544

1,453,056

75.567

51.401

a. Arabica

- Taiwan (Rep. of China)

34,815

122,792

4.893

8.451

- Korea Rep. of (South)

19,250

39,465

2.705

2.716

b. Robusta

- Korea Rep. of (South)

6,999

14,493

0.984

0.997

- Singapore

90,000

165,240

12.649

11.372

c. Excelsa

- Korea Rep. of (South)

20,000

49,810

2.811

3.428

- Singapore

68,520

116,159

9.630

7.994

- Oman

161,000

272,028

22.627

18.721

- USA

12,000

20,520

1.686

1.412

d. Liberica

- Singapore

80,960

179,782

11.378

12.373

- Oman

218,000

472,767

30.638

32.536

2. Coffee, roasted, unground, not

22,000

33,000

2.336

1.167

decaffeinated

- Oman

22,000

33,000

100.000

100.000

3. Extracts, essences and

208,057

1,340,854

22.096

47.432

concentrates of coffee and

preparations

a. Australia

212

1,826

0.102

0.136

b. Brunei Darussalam

550

2,806

0.264

0.209

c. China, People's Rep. of

225

3,423

0.108

0.255

d. Taiwan (Rep. of China)

13,871

85,462

6.667

6.374

e. France

507

8,201

0.244

0.612

f. Hongkong

274

3,794

0.132

0.283

g. Ireland

105

1,310

0.050

0.098

h. Italy

410

2,970

0.197

0.222

i. Korea Rep. of (South)

960

12,213

0.461

0.911

j. Micronesia (Fed. States of)

704

11,663

0.338

0.870

k. Mozambique

1,860

23,223

0.894

1.732

l. Palau, Rep. of

250

3,962

0.120

0.295

m. Papua New Guinea

3,816

29,971

1.834

2.235

n. Singapore

168,689

1,050,293

81.078

78.330

o. South Africa, Rep. of

6,425

18,028

3.088

1.345

p. Thailand

2,000

13,834

0.961

1.032

q. Pacific Trust Territory

2,080

30,188

1.000

2.251

r. Russian Federation (USSR)

3,861

23,143

1.856

1.726

s. United States of America

1,222

13,794

0.587

1.029

t. Hawaii

36

750

0.017

0.056

Total

941,601

2,826,910

100

100

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Philippine Exports of Coffee,
All Forms, 1997

Product Form

Volume (MT)

Value
(US$ FOB)

Percent Share

Volume

Value

Total Exports

1,086.657

4,423,661

1. Raw/green, not roasted, not decaffeinated

542.687

1,221,787

49.94

27.62

2. Roasted, ground, not decaffeinated

0.27

1,539

0.02

0.03

3. Roasted, unground, not decaffeinated

4.124

13,850

0.38

0.32

4. Extracts, essences and concentrates of coffee andpreparations

539.576

3,186,485

49.66

76.03

Source: National Statistics Office

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Coffee: Philippine Exports by form, 1998

Product Form / Country of Destination

Volume (NK)

Value
(FOB-US$)

% Share Volume

Value

1. Raw/green, not roasted, not decaffeinated

711,544

1,453,056

75.567

51.401

2. Coffee, roasted, unground, not decaffeinated

22,000

33,000

2.336

1.167

3. Extracts, essences and concentrates of coffee and preparations

208,057

1,340,854

22.096

47.432

Total

941,601

2,826,910

100

100


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