World demand for Philippine copra
Date
1968-05
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Abstract
Philippine copra makes up more than 50% of copra traded in world markets. Sales of copra usually account for one-fourth of the Philippines' annual foreign exchange earnings. Philippine copra exports therefore deserve a thorough and careful study of its existing markets. The present study covers the period 1956-64. The purpose is to explore the role of Philippine copra in the world fats and oils market, to consider how the demand for Philippine copra operates in each importing country, and to make a comparison of concentration of demand for copra in main copra exporting countries. Relationships between some economic variables are estimated from published statistical data.
Findings show that the demand for Philippine copra in the United States was mostly for inedible uses, as the demand for edible uses has been met by American soybeans. The replacement of soap by synthetic detergents partly explains the decline of Philippine copra exports to that market. On the other hand, end uses of Philippine copra in Western Europe were found mostly in edible products such as margarine and shortening. The growth of synthetic detergents had an imperceptible effect on Philippine
copra because soap making in this area absorbed only a small percentage of total coconut oil used. The rising demand for coconut oil in industrial uses, together with a discriminatory import-tax on coconut oil and the absence of duties on copra, partly explained the expansion of Philippine copra exports to this market in recent years.
Interestingly enough, the major competition to Philippine copra increasingly comes not from other copra
producing countries but from a wide variety of substitutes, especially palm kernel and soybeans. This was partly because the demand for Philippine copra came mostly from industrialized countries, while the demand for the copra of competing countries was concentrated in neighboring Asian countries.
Philippine copra export seems to have bright prospects for future expansion. Western Europe, which is
the world's largest importer of vegetable oil and of Philippine copra, is still not self-sufficient in oil. Rising incomes and population in this area will stimulate further growth in the demand for oil. If measures will be taken to maintain a stable copra price and to improve the quality of copra, most of the rising world demand will be met chiefly by Philippine copra.
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Copra