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Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)

Under the RP-SPAIN, SAIS-BC Project

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir,


Cassava and Queen Pineapple) Under the RP-SPAIN, SAIS-BC Project

I. Introduction
Project Overview
This study on Supply/Value Chain Analyses of Four (4) Commodities (Abaca,
Coco-Coir, Cassava and Queen Pineapple) was commissioned by the
Department of Agriculture RFU-5 and the RP-Spain, "Strengthening of the Agro
Industrial Sector in Bicol and Caraga" (SAIS-BC) Project to come up with updated
and comprehensive S/VCA for Cassava, Pineapple, Abaca and Coco Fiber to
provide basis and reference in assessing the profitability of Coop-beneficiaries
value-adding initiatives in relation to the processing and marketing interventions
provided by the project. The concept of Supply/Value Chain Analysis (S/VCA) for
every commodity is deemed important in the identification of effective
strategies in the production, marketing, processing and supply sourcing aspects.
S/VCA is also expected to be beneficial in crafting future developmental plans
and policy directions specifically in the identified commodity or industry.
The RP-Spain, SAIS-BC Project is a grant assistance from the Spanish Government
through the Agencia Espaola de Cooperacion Internacional para el Desarollo
(AECID). It aims to facilitate technology adoption, resource utilization and to add
value to existing economic activities of the agri stakeholders in the rural areas.
The project components include the establishment and provision of processing
facilities; institutional development and capability building; marketing assistance;
and project management and monitoring.
This S/VCA Study was conducted under the marketing assistance component, to
assist the coop-beneficiaries in assessing the market readiness or competitiveness
of their primary and secondary-processed commodities and linking the
cooperatives to possible markets for their products.

Supply/Value Chain: Definitions and Concepts

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Supply Chain generally means the physical flow of goods that are required for
raw materials to be transformed into finished products and value chain is being
taken to mean a group of companies/entities working together to satisfy market
demands. It involves a chain of activities that are associated with adding value
to a product through the production and distribution processes of each activity.
An organisations competitive advantage is based on their products value
chain. The goal of the company is to deliver maximum value to the end user for
the least possible total cost to the company, thereby maximising profit (Porter
1985).

Input Supply

Farm
Production

Assembly

Processing

Logistics

It is useful to review some of the main activities that occur at each stage of the
value chain to identify key stages where costs can most effectively be reduced,
resources can be most efficiently utilized and profitability be maximized. These
include the following.
Input supply. This stage is concerned with the sourcing of raw materials required
for agriculture production, processing, and trade. Inputs may either be procured
locally or imported. The final value of an input at its place of use includes all
manufacturing costs, transportation costs, customs duty and tax, and unofficial
payments incurred up to that point. The efficiency of a countrys input supply
system therefore has a major bearing on the performance of the entire value
chain.
Farm production. This stage is concerned with primary agriculture production
and ends with the sale of a raw commodity at the farm gate. These transactions
may occur literally at the farm gate or at some other point where the farmer
hands over ownership of the product to the next value chain participant.
Depending on the crop, some type of primary processing (such as the shelling or
bagging of dry grain) may take place at the farm level.

Assembly. This stage involves the collection of agricultural produce from many
farmers by a cooperative-buyer, industrial buyer or licensed assembler and

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

delivery of the raw material to a factory for industrial processing or packaging.


Bagging and simple grading, sorting and classification of crops can also occur at
this stage depending on arrangements made at the first point of sale.
Processing. The processing stage involves the transformation of agriculture raw
materials into one or more finished locally or internationally traded goods. Raw
commodities, of course, are also traded and this stage may not apply to every
crop. Primary processing may start from the site of production after harvest, or
during assembly stage if the assembler also acts as processor.
Domestic and international logistics. The logistics stage is concerned with the
delivery of traded commodities to their final market destination. This may either
be a foreign market in the case of exports, or a local market for import
substitutes. For import substitutes, the logistics stage ends at the domestic level,
but the analysis is still concerned with the cost of importing a like product from
the nearest or most competitive country.
Price build-up from stage to stage. In value chain analysis, all inputs and outputs
carry forward their inherited/accumulated value from the previous stage.
Although this may seem understandable enough, it is still imperative to mention
this especially in the VCA of agricultural commodities where the focus is usually
on the qualitative aspect of product value and not on cost levels at different
stages as a key determinant of competitiveness and profitability. Price build up in
highly perishable and seasonal agricultural products depends on the efficiency
of the input supply system, farm production, assembly, processing, and logistics
costs up to the final domestic market.
Product transformation. Throughout the value chain agriculture products take on
many different forms. In the most basic sense, this may simply be the difference
between a recently harvested farm product with high moisture content and one
that has been assembled in a warehouse and dried for several months. As
described, most agriculture raw materials also undergo some type of industrial
processing to produce one or more final traded commodities. This may involve
any number of processes such as granulating (cassava), drying, decorticating &
baling (coco-coir) and fiber extraction (abaca and pineapple fiber). Again, this
point on product transformation may seem understandable enough, but the
fact that a single agriculture commodity can take on different forms at each

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

stage of the value chain means that great care is needed to track the
accumulated value across products in a consistent manner.
2. Scope of the Study
The scope of the study is limited to the RP-Spain, SAIS-BC Project cooperativebeneficiaries as the sub-sector in the six (6) provinces of the region covering the
stages of production, processing and marketing. The study identified key
constraints and opportunities as well as the dynamics of the supply/value chain
actors of the four focus commodities and identified the competitive advantage
of the actors to increase their productivity and profitability in terms of production,
value-adding and processing. The data gathering results for this study is annexed
to this report.

3. Objectives
General
This study has the primary purpose of establishing a quantified description and
assessment of the value-adding activities for Cassava, Pineapple, Abaca and
Coco

Fiber

being

undertaken

by

the

project

beneficiaries

using

the

Supply/Value Chain Analysis tool.


Specific
This study has the following specific objectives:
Value Chain
1. Develop a commodity value chain map; identify the major players in the
value chain
2. Identify the constrains and opportunities faced by the coop-beneficiaries
commodity key players along the value chain
3. Identify the competitive advantages/disadvantages of the coopbeneficiaries in terms of market access, technology/product
development management/organization, input supply (raw materials),
finance, policy, operating environment/infrastructure, trade regime, etc.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

4. Identify sector/commodity prospects and barriers to growth and relate


them to an analysis of the competitive strength of the value-adding
business.

Marketing Conditions and Project Support/Interventions


1. Identify the present market conditions of the sub-sector market, key
players, demand supply gap, pricing trends, imports and exports (if
applicable), distribution networks
2. identify the gaps and opportunity areas for possible interventions of the
project and assess how the projects previously-provided interventions
affect the value-adding systems of the four focus-commodities

4. Methodology of the Study


To achieve the above mentioned objectives, the study was divided into three (3)
primary Phases 1) Preliminary Consultations and Data Gathering, 2) Data
Integration, Critiquing and conduct of Training and Workshop 3) Presentation of
key findings, and Finalization of S/VCA Outputs. A combination of survey, guided
interview, Focused-Group Discussion and Key Informant Interview (as sources of
primary information) and literature review (as source of secondary information)
were conducted. The primary information served as the critical framework for
analysis while the secondary information provided important inputs for
understanding the context and rationale behind the status of subsector.
This combination has provided the needed context-bound information that lead
to explaining the commodity scenarios more concretely as it was expected that
a simple data-collecting instrument would neither reveal the true picture of the
value addition and the dynamics nor would it demonstrate the true benefits of
such activities. Further, it was also expected that the observation would also be
difficult particularly with the limited time frame thus, both qualitative and
quantitative data gathering were used.
This strategy has provided meaningful insights as to how the producers,
processors, assembler, and other sectors along the value chain perceive various
issues and address specific constraints of their commodity of concern. Also, the
strategy enabled the respondent to express subjective insights and feelings to
the interviewer regarding third party information, or into a task situation.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Lastly, in order to facilitate more efficient conduct and coordination of the


activities within the study, a team composed of DA, FIDA & PCA Personnel was
ordered to spearhead the activities under the 3 major phases of the study.
Results and data gathered during the first phase were processed and analyzed
by the coop-beneficiaries themselves during the conduct of the 3-day
Supply/Value Chain Training Workshop under the guidance and supervision of
the resource persons from the University of Asia and the Pacific. The training
workshop was organized to achieve four major objectives, 1) to understand the
dynamics of the four focus commodities and the coop-recipientsvalue-adding
activities 2) present both the coop-beneficiaries and survey team outputs and
seek clarification on critical issues of the subsector, 3) to validate the findings,
and 4) to explore ideas for interventions that addresses constraints and aide in
the development of the value chain. The workshop provided certain clarity to
the findings and also offered certain new information. Details, Schedule and
participants of the activities conducted under the Phases 1 and 2 of the study
were provided in Annexes 2-4 of this report.
Sampling Framework and Information Gathering
For this study, key representatives of all coop-beneficiaries of the SAIS-BC Project
were interviewed and requested to answer survey questionnaires to gather data
and information. Along with the survey, six (6) FGDs were conducted in all
provinces of the Bicol Region with 10-25 participants in each session and Key
Informant Interview of progressive processors and assemblers (who at the same
time serve as market/buyers of the processed products of the coopbeneficiaries) for in-depth understanding on selected key issues on: production,
marketing, trading, processing, as well as constraints/opportunities and potential
project interventions to minimize the constraints and take advantage of the
opportunities.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

QUEEN
PINEAPPLE

COMMODITY PROFILE

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Pineapple, scientifically known as Ananas comosus Merr. is one of the country's


most popular fruits. It is also one of the top earners of foreign exchange among
the country's agricultural commodities.
Its fruit has tapering shape, deep eyes, yellow rind to deep yellow flesh color, has
small core, crispy texture, rich flavor and distinct sweetness. It is smaller in size and
has spines on the leaf and tip.
The fruit contains water, carbohydrates, substantial amounts of Vitamin C and
Potassium and other nutrients
Pineapple Varieties
Several varieties of pineapple are available in the Philippines. One is the Smooth
Cayenne or Hawaiian, which is the heaviest, most popular, and best for canning.
The Queen or African Queen or Formosa is the sweetest. The Native Philippine
Red or Red Spanish is cone-shaped and considered of medium quality. It is also
grown for its fiber. The Cabezona is the largest, measuring approximately 8-12
inches long when fully matured. Other varieties include the Buitenzorg or Java,
Sugar, Loaf and Abakka.
Table 1. Commonly Grown Pineapple Varieties
SIZE

VARIETY

SHAPE

COLOR OF
FLESH

FLAVOR

Smooth
Cayenne

2.3 to 3.6 kg (big)

cylindrical

Light yellow

Sweet

Queen

0.45 to 0.95 kg
(small)
.91 to 1.4 kg
(medium)
8 to 12 in.

Tapering

Deep yellow

Barrel
shaped
cylindrical

Pale yellow

Sweet &
crisp rich
Sweet and
coarse spicy

Red Spanish
Cabezona

TEXTURE
Slightly fibrous

fibrous

Dark green to
bright yellow

Queen Pineapple is traditinaly grown in Bicol, mostly in the province of


Camarines Norte particularly in the municipalities of Basud, San Lorenzo Ruiz, San
Vicente, Labo, Talisay, Daet, Paracale, Sta. Elena, J. Panganiban and
Capalonga. Due to flower induction technology, supply of fruit is available year
round.

Nutritional Facts

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 2. Nutrition Facts of Pineapple Fruit


Serving size (oz)
Calories (Kcal)
Carbohydrates (g)
Fat (g)
Crude Fiber (g)
Sodium (mg)
Potassium
Vitamin C
Thiamin (Vit. B1)
Riboflavin (Vit. B2)
Niacin
Folic Acid
Vitamin B12
Copper
Pantothetic Acid

4
90
21
1
.66
10
165
160
35
6
2
8
2
4
2

Source: Agribusiness Systems Assistance Program (ASAP-USAID), DA-R5

Production Volume
Pineapple production posted a 3.87 percent decline in the last quarter of 2009
from its level in 2008.This drop in production as well as that in the previous quarter
resulted in 3.75 percent decrease in 2009 pineapple harvests (Table 1). In
SOCCSKSARGEN, pineapple output dropped by more than 5 percent in 2009 as
farmers shifted to cavendish and corn cultivation. The production gain in
Northern Mindanao, the top producing region did not offset losses in
SOCCSKSARGEN (Figure 4). In Camarines Norte, yield decreased as farmers were
compelled to use less farm inputs due to high costs. Area planted however,
increased by 0.95 percent in 2009 despite the reduced area in Saranggani due
to area expansion of corporate farms in Bukidnon and Misamis Oriental (Table 3)

Source: BAS Major Fruit Crops Quarterly Bulletin 2009

Table 3. PINEAPPLE: VOLUME OF PRODUCTION IN METRIC TONS, BY REGION, BY PROVINCE


PHILIPPINES, 2003-2008

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

10

Source: BAS Major Crops Statistics 2003-2008

Similar to the change in the land area where pineapples where harvested, the
production volume showed erratic changes but similar trend as area harvested.
From 2005 to 2007, there was a steady increase in the volume of production. But
in consecutive years the production decreases in the when the prices of fertilizers
tremendously increased.

Table 4. Volume of Production (mt), 2005-2009, Region/Province/Year

11

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Particulars
Region V (Bicol
Region)

Albay
Camarines Norte
*
Camarines Sur
Catanduanes
Masbate
Sorsogon
* Formosa variety

2005

2006

2007

2008

2009

104,995.39

112,210.00

116,815.86

111,529.72

109,967.07

1,099.53

1,006.00

991.88

1,018.16

1,044.88

99,892.32

107,338.00

112,241.09

106,555.00

104,789.00

2,812.26
13.37
.
1,177.91

2,765.00
14.00
.
1,089.00

2,669.22
11.55
.
902.12

2,820.67
12.59
50.00
1,073.30

2,860.24
12.51
91.20
1,169.24

Table 5. PINEAPPLE: AREA PLANTED IN HECTARES, BY REGION, BY PROVINCE,


PHILIPPINES, 2003-2008

Source: BAS Major Crops Statistics 2003-2008

Camarines Norte continues to be the top producer of pineapples with 106,555


metric tons of pineapple production in 2008 accounting for 94.94% of the total

12

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

regional production. The provinces of Camarines Sur, Albay, Sorsogon and


Catanduanes shared the remaining 5.06 percent.
In terms of pineapple fibers, the production comprises handscraped pina fiber
(includes knotted pina fiber), Decorticated Pineapple fiber and

Brushed

Pineapple fibers.
Knotted handscraped pina fiber is being produced by LPMPC, priced at
P5,000/kg is used in weaving pina cloth which is priced at 1,800/cut. In 2009 a
total of20.4071 kgms. Were produced. Decorticated pineapple fibers during the
year reached 4,058.35 kgs. Of which 1,706.95 kgs were sold to the following
buyers at Php 200-250/kg
1. Philippine Textile Research Institute (PTRI)
DOST Gen. Santos Ave. Bicutan, Taguig, MM

2. MASA Ecological Development Incorporated


Tagaytay City

3. C & J Specialty Paper (Phils.)


Brgy. Langkiwa, Binan, Laguna

Table 6. Pineapple Fiber Production


MONTH
JANUARY
FEBRUARY
MARCH
APRIL
MAY
JUNE
JULY
AUGUST
SEPTEMBER
OCTOBER
NOVEMBER
DECEMBER
TOTAL

PRODUCTION
KNOTTED PINA
Deco Pina Fiber
FIBER (kg)
(kg)
1.616
2.181
None
1.51
1.438
3.46
3.754
3.281
.665
2.110
3
537
20.4071

540
552
587.3
265.35
475.5
210.5
568.7
356.2
106.0
74.0
84.5
247.3
4058.35

SALES (kgs.)
200
605
200

200
100
1.95
150
100
150
1706.95

From April to September 2009, the Pineapple Growers of Matnog, Basud,


amarines Norte

produced 720 kgs. Of brushed pina fiber. It was supplied to

Asia-Link Craft, a specialty paper processor in Marikina City who shoulders the

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

13

cost of production for the brushed pina fiber produced by the cooperative. Price
of the brushed pineapple fiber is at Php235.00/kg.

Area Harvested
There has been an erratic change in the volume of production among areas
planted with pineapple.For 2005 and 2006, there was an increase in the area
planted. But in the last three years, there was a decreasing area planted with
pineapple. Camarines Norte has the biggest area, followed by Camarines Sur
smallest area planted with pineapple is Catanduanes.
Table 7. Area Planted/Harvested (in hectares), 2005 - 2009, Region/Province
Particulars

2005

2006

2007

Region V (Bicol Region)


Albay

3,837.00
100.00

3,847.00
80.00

3,323.00
80.00

Camarines Norte
Camarines Sur
Catanduanes
Masbate
Sorsogon

3,250.00
316.00
3.00
.
168.00

3,255.00
335.00
4.00
5.00
168.00

2,731.00
335.00
4.00
5.00
168.00

2008
3,115.0
0
75.00
2,528.0
0
335.00
4.00
5.00
168.00

2009
3,109.0
0
75.00
2,520.0
0
335.00
4.00
5.00
170.00

MARKET
Local Market
Fresh Pineapple Market
Local traders buy the bulk of the pineapple harvest. The product is in turn
marketed and sold in nearby provinces such as Albay, Camarines Sur, Laguna
and Quezon. Balintawak, Divisoria and Munoz markets of Metro Manila absorb a
big part of the harvest. The growers/retailers cater to the local demand for
pineapple.
They also sell their fresh pineapple at the roadside to travelers and motorists. The
mode of payment for pineapple fruits brought by the traders is either in cash or
installment basis.
Farmgate prices of pineapple are based on the size and supply of the
commodity in the market, size classification ranges from extra/jumbo (Extra
large) to butterball (very small) with bigger sizes commanding higher prices.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

14

Another form of pricing is called escalera where sizes form the extra/jumbo to
tercera have only one price and those from 4th to butterball also have one price.

Factor that affect the price margin are transportation, handling and hauling
expenses.
Retailers in Metro Manila in turn sell their fruits at prices based in weight.
Pineapple prices do not vary much owing to the fact that the fruit is available all
throughout the year.
CLASSIFICATION
Extra large

-----------

above 1,100 g

Large

-----------

800 1,099 g

Medium

-----------

500 799 g

Small

-----------

350 499 g

Butterball

-----------

below 350 g

MATURITY INDEX

Widening of the eyes

For distant market, harvest before fruits show trace of yellow

For immediate consumption, harvest fruits with trace of yellow

MARKET PREPARATION

Sort fruits according to size and ripeness


Cull out those with injury, disease and/or insect damage
Trim stalk, leaving about 1cm.
For disease control, dip in 0.2% thiabendazole (fungicide) for 1 minute
To extend shelf-life, apply wax by brushing the fruit surface with an
emulsion of mineral oil, fungicide solution and liquid detergent (1:18:0.05
v/v/v).
Air-dry completely before packing in containers or before bulk loading
inside transport vehicle

PRODUCT TYPES and APPLICATION


As fresh ingredient in fruit salad sweetened with condensed milk and
cream.
As ingredient in ice-cream, shakes, halo-halo and gelatin.
As filling for cakes, pies, tarts and bread.
As sweetening ingredient for meat dishes, curries and stews.
As jam, jelly, puree and marmalade.
As thirst quencher when made into fruit drinks, shakes and other mixed
beverages.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

15

As preserved fruit cooked in syrup (slices, chunks, tidbits or crushed)


As candied fruit (dehydrated)

As fermented product such as wine vinegar and soy sauce.


As fermented fruit pulp (nata de pina) used as salad ingredient or as
dessert

Commodity Flow & Marketing Chain and Outlets


Several intermediaries are involved in the marketing of pineapple in the region.
From the growers, the fruits are either sold to wholesaler/traders, retailers, or
directly sold to processors before they reach the consumers. Small amounts of
the produce are also being sold directly to the consumers in the locality.

Figure 2. Commodity Flow of Fresh Pineapple

Wholesaler/traders represents majority of the pineapple traders in the regional


market who generally supply the retailers. They primarily sell to retailers and
sometimes directly to consumers. Retailers are those who sell directly to
consumers. They sell pineapples in various forms such as unpeeled, peeled, and
peeled and sliced. Processors, on the other hand are those sell pineapple in
various processed forms such as pineapple juice, pineapple jam, dehydrated
pineapple, pineapple tart, empanaditas, and pineapple jelly.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

16

Sales Arrangements
Sales arrangements vary at different marketing levels. Manner of selling is based
on either picked-up or delivered while mode of payment on either cash or
installment. Normally, the wholesaler/retailer picks up the commodity at the
farm. Very seldom does the farmer bring the produce to the buyer's place since
this will involve arranging for transport and incurring additional cost. This usually
occurs during peak harvest time when farmers have to bring their produce to the
buyers to facilitate product disposal.
Among traders, manner of selling is usually based on delivered basis except for
those procurement "viajeros" who pick up their commodity from the suppliers.
The volume of supply also influences manner of selling. In times of over supply,
seller deliver to buyers while in times of scarcity, buyers pick up the products.
Processed Pineapple Market
Processed pineapple products are sold in the local market. The Caayunan MultiPurpose Cooperative in Basud, Camarines Norte is engaged in pineapple
processing. Their operation is still at the micro level scale. Members also engage
in direct selling to different government offices, private enterprises and
educational institutions. Processed pineapple may take the form of dehydrated
pineapple, pineapple tart, empanaditas, pineapple jelly, pineapple juice, and
pineapple jam.
Pineapple Fiber Market
Fiber production from the leaves of pineapple is still at the testing stage. In 1998,
the Department of Trade and Industry, in cooperation with the Provincial
Government of Camarines Norte, conducted a spinning trial. The Manila Bay
Spinning Mills (MBSM) for its initial commercial yarn production bought the one
ton dried fiber produced of these trials. The first produce was bought at P90.00
per kilo with succeeding deliveries bought at P120.00 per kilo.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

17

Machine Decorticated Pineapple Fiber


The following are the list of spinning mills, which are the possible buyers of
pineapple fiber:
1. Dragon Textile Mills
Binondo, Manila
Contact Person: Mr. Carlos Bun Sit Chung
2. Finetex Spinning Mills, Incorporated
Dasmarias, Cavita
Contact Person: Mr. Churchil Vendiola

3. Filspin, Incorporated
Canumay, Valenzuela City
Contact Person: Mr. Lyndon Tan
4. Surya Manufacturing Corporation
Contact Person: Mr. R. K. Vig
5. Filway Development Corporation
Dr. Santos Avenue, Paraaque City
Contact Person: Mr. Benjamin Tan
6. Indophil Textile Mills
Marilao, Bulacan
Contact Person: Mr. V. K. Jain
7. Kewalram Philippines, Incorporated
Calamba, Laguna
Contact Person: Mr. Krishnen Kumar
8. Litton Mills, Incorporated
Edsa cor Ortigas Avenue, Quezon City
Contact Person: Mr. James Go
9. Malayan Textile Mills, Incorporated
Sun Valley Subdivision, Paraaque City
Contact Person: Mr. Tan Ching
10. Manila Bay Spinning Mills, Incorporated
Lopez Jaena Street, Marikina City
Contact Person: Mr. Arsenio Tanco

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

18

11. Solid Development, Incorporated


San Ildefonso, Bulacan
Contact Person: Mr. Alfonso Castillo
12. Solid Mills, Incorporated
Km. 20 East Service Road, Muntinlupa City
Contact Person: Mr. Dicksen Young
13. Yarn Ventures Resources, Incorporated
Cabuyao, Laguna
Contact Person: Mr. Toshiak Okuma

The machine decorticated pineapple fiber is also being used in the production
of handmade paper. The target regular buyers for this product are:
1. Mr. Asao Shimura
Kannabis Press
Poking, Capangan, Benguet
2. Mr. Takaaki Okada
Nippi Company, Incorporated
Pio Del Pilar, Makati City
3. Ms. Anna Marie S. de Chaves
Yamamoto-Tomo Menko, Ltd.
Legazpi Village, Makati City

Handwoven Pia Cloth


Listed below are the possible buyers of handwoven pia cloth:
1. Philprime Garments Manufacturing Co., Inc.
2671 Honduras St., corner Batangas St.,
Makati City
2. Perpetual Craft
NHA Industrial Building II
Lapu-lapu Avenue, Kaunlaran Village, Navotas
3. Agnes Philips
Veness Haus of Fashion
Daet, Camarines Norte

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

19

4. Laguna-based embroiderers:
Aileens Hand Embroidery

Ailyns Embroidery

Amelines Embroidery

Arevalo Sinamay Dealer

Carla Chris Hand Emboidery

Carmelitas Exclusive Embroidery

Coras Embroidery

De Leons Embroidery

Deng Lacbay Embroidery

Dial-Iris Hand Embroidery

Eduviges Alunan Embroideries

Eleazars Hand and Machine Embroidery

Fels Embroidery

Florencio Mamonong

Gloria Anonuevo

Imeldas Hand Embroidery

Lolys Embroidery

Mamonongs Embroidery

Marcia Ballesteros

Melys Hand Embroidery

Nemecia Embroideries

Neritas Embroideries

Rondels Embroideries

Valeriana Abederia

PROCESSING
The Formosa pineapple is a versatile fruit that is suited for the production of
quality dehydrated pineapple and pineapple juice. Its leaves are good sources
of fiber, which when decorticated and mixed with polyester, produces a
polypia cloth. The machine decorticated fiber is also an ideal raw material for
handmade paper, while the fiber extracted from the leaves through manual
scraping could be woven into pia cloth.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

20

Dehydrated Pineapple and Pineapple Juice


The Caayunan Multi-Purpose cooperative (CMPC) in Barangay Caayunan,
Basud, Camarines Norte manufactures dehydrated pineapple and pure
pineapple juice, while the Samahan ng Nagkakaisang Mamamayan ng San
Antonio in Barangay San Antonio (SNMSA) and Labo Multi-Purpose Cooperative
at Labo, Camarines Norte produce machine decorticated fiber.
Handmade Paper
There are only three (3) producers of handmade paper in Camarines Norte, the
Guinacutan Handmade paper in Labo, the Macca Arts and Crafts in Paracale
and the Labo Multi-purpose Cooperative. The former is not operating regularly,
while the latter has already their own regular market in Metro Manila. Actually
Macca manufactures fans and boxes using handmade paper as raw material
and seldom sells paper sheets.
Machine Decorticated Pineapple Fiber
The fiber extracted from Formosa pineapple using the decorticating machine is
strong and silky in appearance that can be manufactured into a fine translucent
fabric locally known as polypia . It passes the spinning trial to by the Fiber
Processing and Utilization Laboratory (FPUL) of the Fiber Industry
The signing of Republic Act No. 9242 last October 2004, prescribing the use of
Philippine Tropical Fabric for uniforms of public officials and employees, gave
future to machine decorticated pia cloth.
Based on the test result of PTRI on the fineness and tensile strength of manuallyscraped Formosa fiber using their spinlab stelometer strength tester, the following
are the results:
Table 8. Characteristics of Pineapple Fiber
Fiber
Test Result
Fineness
* Coarse
29.45 denier
* Fine
21.59 denier
Tensile strength
* Coarse
30.29 kg.-meter/gram
* Fine
23.70 kg.-meter/gram

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

21

The acceptable fineness of fiber is 20 denier and above while the acceptable
tensile strength is 15 kilogram-meter/gram and above. The test results therefore
showed that both the coarse and fine manually scraped Formosa pineapple
fiber surpassed the required standard for fineness and tensile strength for textile
production.
N e w ly H a rv e s te d F o rm o s a P in e a p p le L e a v e s

H a n d S c r a p in g
W a s h in g
D ry in g
D is e n ta n g lin g
K n o ttin g
B o b b in W in d in g

M a c h in e D tic
e c ao tio
r n

B ru s h in g

U n b r u s h e d & W a s te
F ib e r

W a s h in g
S u n d ry in g

C le a n in g /R e m o v a l o f
D is c o lo ra tio n
B o ilin g a n d W a s h in g

C le a n in g
B ru s h e d P i a fib e r

B e a tin g a n d W a s h in g
B le n d in g / C o lo rin g

W e a v in g

M o ld in g / D e s ig n in g

H a n d lo o m P i a C lo th

P re s s in g / C u ttin g /
a n d D ry in g
H an d m ade P ap er
Figure 3. Steps in Processing Pineapple Fiber and Pulp

Value Chain Analysis for Queen Pineapple Fiber (LPMPC Model)


Sector Introduction
The fiber extracted from Formosa pineapple using the decorticating machine is
referred to as Machine Decorticated Pineapple Fiber, strong and silky in
appearance that can be manufactured into a fine translucent fabric locally
known as polypia.

It passed the spinning trial conducted by the Fiber

Processing and Utilization Laboratory (FPUL) of the Fiber Industry Development


Authority (FIDA).

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

22

The signing of Republic Act No. 9242 last October 2004, prescribing the use of
Philippine Tropical Fabric for uniforms of public officials and employees and for
other purposes, gives future to the proposed project on machine decortication
of Formosa pineapple leaves. With the population of government employees
nationwide said to be already 1.4 million and average per capita textile
consumption for four (4) blouses or polo barong of 1,600 grams, approximately
2,240 MT of textile needs to be produced for a year. Since the polypia fabric
has a fiber blend of 80% polyester and 20% pineapple fiber, there is a total
demand of 448 MT of tropical fiber nationwide in one year.

On the other hand, the demand for handwoven pia cloth from Year 2000 to
Year 2004 registered an average export sale of US$ 0.0077 million or Php 0.418
million peso-equivalent. The top 5 importing countries are France, United State
of America, Great Britain and Northern Ireland, Hong Kong and Japan.

The LPMPC is currently producing the seda type of handwoven pia cloth, which
is made of coarse fiber and silk yarn. However, they also intend to produce the
liniwan, which is made of pure and fine Formosa pineapple fiber.
The pia cloth made of liniwan or pure fiber, as well as pia seda are excellent
materials in making shawls, scarves, bags, cushion covers, placemats, table
runners and window blinds. It has slowly penetrated the foreign markets like
Japan, Hong Kong, United States, Canada, Italy, France, Denmark, Germany,
Switzerland, Netherlands, United Kingdom, China, Malaysia and Thailand.
Fiber produced from pineapple leaves go through five (5) basic processing
operations 1) Harvesting/collection of leaves 2) decortications 3) washing 4)
drying 5) cleaning. Only the decortications process is mechanized while the rest
of the four remaining processes are being done manually. The pineapple subsector study tried to perform cost analysis in each activity related to operation or
production of the fiber, considering the inbound and outbound logistics involved
in fiber production, processing, trading and marketing.

Definition of Actors in the Chain

23

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Industry Players
Producers: Farmers engaged in production of queen pineapple and source of
pineapple leaves. They are usually the ones harvesting and gathering fresh
pineapple leaves and sell it to other coop-assemblers/local traders or processors.
Local Trader: Local traders are directly involved in buying and selling pineapple
leaves

from

different

farmer/producers.

They

usually

act

as

the

consolidator/assembler of fresh pineapple leaves


Assembler: Wholesalers deal with large volume of products either through local
traders or farmers. They invest and transact large amount of money in their
business and often control the market price.
Trader/Exporter: These are large traders mostly working for large forward markets.
They may obtain their products from the wholesalers, farmers or local traders and
even through their own commissioning agents to collect desired quantities of
products. These traders often work as exporters and sell directly to foreign market
traders and also play the role as commission agent for other forward markets.
Processor:

Processors

are

engaged

in

creating

value

addition

by

processing/converting pineapple leaves into fiber and pulp for commercial uses.
Assemblers can sometimes be the processors at the same time depending on
the manpower and financial resources that can be tapped.

Commodity/Industry Constraints along the chain

Production/Input Supply Formosa pineapple farms in Camarines Norte ranges


from 1 to 3 hectares per farmer on the average. This variety can give-off 10-12
pieces of leaves per plant at maturity as fiber source.
The 142 members of the LPMPC who are pineapple growers have a total area
planted to pineapple of 40.15 hectares. If the annual production will cover 25.92
hectares, then these coop members are assured of a sure market of their
produce.

The 40.15 hectares plantation of the coop members who are pineapple growers
yields a total of 541,632 kilos leaves. They are assured therefore of an additional

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

24

annual income of Php 270,816.00 from pineapple leaves, which was long
considered as waste in agricultural production.
Despite the apparent financial benefits that can be derived from pineapple
leaves, majority of large pineapple producers in Camarines Norte is not totally
keen on harvesting pineapple leaves from mature, fruit-bearing stage pineapple
plants for fear that it will adversely affect or decrease the size, quality and
volume of pineapple fruits that may be harvested from the plants. Thus, the
periodic scarcity of supply fresh pineapple leaves for fiber and pulp processing.
Another constraint is the physical assembling of harvested leaves and hauling/
transport of the same from production to pick-up or assembling areas. Since
pineapple plantations are mostly situated along the slopes of the hilly terrain of
barangays covered by the province of Camarines Norte, carrying on-foot or
manual or animal drawn carts is the most reliable mode of transport of the
gathered leaves from point of production to processing centers. Such scenario
posts negative affects both on the timeliness and hauling/transport cost of
pineapple leaves.
Processing with regards to processing of pineapple leaves, preliminary
processing steps prior to machine decortication (handscraping, washing,
disentangling, knotting etc.) are being done manually. Thus, variability in terms of
time vs. efficiency, meeting/maintaining purity, quality and technical standards
are all arbitrary depending on the skill, mastery and competence of the workers.
For a specialty product penetrating and competing at the world market arena,
this scenario may post serious problems in the overall competitiveness of the
product.
Market The Office of the President, through the approval of Republic Act 9242
prescribing the use of Philippine Tropical Fabric for uniforms of public officials and
employees, the demand for pineapple fiber eventually increased. However,
since the SNMSA and the LPMPC could not cope up with the increasing demand
due to lack of working capital and machine deficiency, the LPMPC decided to
increase its production capacity by sourcing additional decorticating machines.

If more machine decorticated pineapple fiber will be produced in the province,


more pineapple leaves will be needed. The more pineapple leaves that would

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

25

be utilized, the more employment would be provided and the more increase in
income will be realized by pineapple growers. With these volumes of local
demand, steady market presence of international buyers, the increasing
variability and nature of use as well as the limited source of quality pineapple
fiber worldwide establishes the need for more pineapple fiber and pulp supply.
The main constraint however in the marketing of pineapple pulp and fiber is the
inadequacy of volume of supply of fiber which is being demanded by export
markets. The coop-processors/assemblers will have to rely on intermediary
assemblers in Metro Manila in order to market their produce because they
cannot enter into an export marketing contract due to limited volume of fiber
available and the inability to satisfy the required frequency of delivery. Thus,
local coop beneficiaries cannot directly demand or haggle for a higher buying
price of their produce.
In terms of trading logistics, the provision of hauling/delivery trucks can
significantly decrease trading cost and therefore increase traders buying price of
fiber from processors.
VALUE CHAIN (The case of LPMPC)
Production Cost
The total cost of pineapple fiber production sums up to P1,102.26 with an
estimated P110.23 cost per kilogram of production. This would yield net income
of P 197.74 or P19.77 per kilogram. This is based on the assumption that
production is 10 kg/day, with 22 days/month operation, thus 2,640 kg per year.
The details of the cost are summarized on the next table.

Table 9. Table Costs and Returns of Pineapple Fiber


Production, Camarines Norte, 2010 (10 kg dry fiber

26

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

(DF)/day)
ITEM

QUANTITY

UNIT

UNIT COST

TOTAL

P/kg

COSTS
Raw material
Leaves (800kgs leaves make 10kls
DF/day)

800

kg fresh leaves

0.10

80.00

8.00

800

kg fresh leaves

0.40

320.00

32.00

Decortication of Leaves

40

kg wet fiber

8.00

320.00

32.00

Washing, Drying & Cleaning

40

kg wet fiber

4.00

160.00

16.00

Decortication of Leaves

3.50

liters

34.50

120.75

12.08

Transport of Workers & mach

0.35

liters

34.50

12.18

1.22

Lubricant

0.06

liter

127.00

7.47

0.75

Driver (transport of workers)

0.09

MD

250.00

22.06

2.21

37.90

3.79

21.90

2.19

1,102.26

110.
23

Labor

Gathering of Leaves

Fuel

Depreciation
Decorticating machine
(50,000/5yrs)
Hauler (86,800/15yrs)
TOTAL COST
RETURNS
Dried Fiber (unbrushed)

10

Selling price of dried fiber


NET INCOME

kg.
130.00

1,300.00
197.7
4

130.
00
19.7
7

ASSUMPTIONS:
production of 10 kg/day, with 22 days/month operation; 2,640 kg per year

Marketing Cost
There is also an additional cost in the marketing of the goods. An amount of
P24,414.00 is added for the marketing of pineapple fibers. For goods marketed in
Manila, an additional P750 is needed for the freight. The marketing costs
subtracted by the selling price of the products yields a net income for
consolidator of about P1,826 or P12.24 per kilo.

Table 10. Marketing Costs for Pineapple Fiber, Camarines Norte, 2010
ITEM
QUANTITY
UNIT
UNIT
TOTAL

P/kg

27

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

COST
MARKETING (150kgs per load)
Buying price
Fuel cost
(Labo-Daet back&forth)

150

kg

130.00

19,500.00

130.
00

liters

34.50

138.00

0.92

Driver (250/day)

hours/load

31.25

62.50

0.42

Helper (200/ day)


Packaging Material (Plastic)
6bags (good for 150kgs)

2
6

hours/load
bag

25.00
15.00

50.00
90.00

0.33
0.60

Packing Tape
(1roll good for 500kls)

roll

45.00

13.50

0.09

load

60.00

60.00

0.40

291.00

1.94

49.50

0.33

4,159.50

27.73

24,414.00

162.76

750.00

5.00

25,164.00

167.76

27,000.00

180.00

1,836.00

12.24

Packing (200-peso MD/500kgs DF)


Depreciation of warehouse
Depreciation of weighing scale

1
depreciation=(87,500/10yrs)/
4,500 DFper yr
depreciation=(7,500/5yrs)/
4,500 DFper yr

Administrative cost
Total

Volume marketed to Manila

Freight to Manila

150

kg

150

kg/load

5.00

TOTAL MARKETING EXPENSES

Selling price for Manila

150

kg

180.00

NET INCOME OF CONSOLIDATOR

ASSUMPTIONS:
production of 10 kg/day, with 22 days/month operation; 2,640 kg per
year
depreciation = (87,500/10yrs)/4,500 DF/yr
depreciation = (7,500/5yrs)/4,500 DF/yr
* Weighing Scale = 5,787/2,640 kg DF/ yr

Supply Chain
The production of pineapple fiber in Camarines Norte follows a specific supply
chain. From the output supplies or the purchasing of raw materials, the
pineapple fibers are produced, processed and transported to markets. They are
then classified and stocked for trading. The pineapple fibers also will undergo
quality control to ensure top quality before they reach the market.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

28

Costing for the Supply Chain


Raw materials are procured at P8 per kilogram. It is then processed at a cost of
P98.81. Various logistics expenses and trading cost sum up to P10.10 and P31.11
respectively. The buying price as the pineapple reac hes the market is P180 per
kilogram.

The above diagram shows the value addition, cost build up and profit margin at different stages

Key Issues on Pineapple Fiber Production

29

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

The table below summarizes the issues in terms of raw material supply,
fiber production, marketing and logistics of pineapple fiber production. As
indicated

in

the

result

of

the

SVC

analysis

It is also

coupled

with

recommendations on probable solutions on these issues.

KEY ISSUES
SEGMENT
Raw
material
supply

Fiber
production

Issues
unwillingness of some
farmers to sell their
pineapple leaves

high perishability of
leaves
low production

high production cost

high maintenance
cost of machinery
and equipment
high risk in machine
operation
inconsistent quality of
fiber

Marketing

Logistics

unsustainable supply
of quality fiber
lack of regular buyers
longer term of
payment by buyers
high freight cost (to
Manila)

Recommended Actions
Information dissemination and technology
transfer on the proper way of harvesting
pineapple leaves and training harvesters or
explore the possibility of cultivating pineapple for
the purpose of fiber production alone.
conduct of processing activities on field and
improvement in handling & transport efficiency
Improve fiber extraction method through
continuous process research & equipment design
improvement
Consider mechanized washing and drying of
fiber, consider the cost vs. benefit of installing
water source and waste water treatment facility
educate operators on proper utilization and
maintenance of machinery and equipment
enhance safety and efficiency of machine
through training of operators and improvement of
the design of machine/equipment
standardize the gathering and processing of fiber
through improved processing technology &
mechanization of the entire fiber extraction
process
Information dissemination, increase in capital to
provide for more MOOE and trading fund
Execute marketing contract with institutional
buyers
Strict stipulation of payment terms in the contract
of marketing
Maximize volume per delivery

30

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Provision of delivery vehicles

Storage/ classifying buildings

Mechanization of fiber
extraction
Value-adding (fibercraft
manufacturing)

LOGISTICS

INPUT
SUPPLY

LOGISTICS

PRODUCTIO
N

PROCESSING

Proper Fertilization
Appropriate culture
and management
strategies

TRADING

MARKET

Collective marketing

Collective marketing

Direct marketing

Direct marketing

Fiber classifying

Fiber classifying

Tumbling

Provision of
hauling vehicles

Suggested interventions along the supply chain system of pineapple fiber, Bicol Region 2010.

Impact of SAIS-BC-Provided Interventions


On Production
Indirect effect on the increase in production of pineapple was realized because of
the additional financial benefits that can be derived from selling pineapple leaves
for fiber and pulp purposes.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

31

On Processing/Value-adding
The provision of processing equipment/machineries by the SAIS-BC Project provided
significant reduction in the processing and marketing/trading cost of the
cooperative-recipient. Foremost in the benefits provided by the project is the
utilization of the pineapple leaves which is otherwise considered waste by pineapple
fruit producers, creating alternative livelihood source and employment for the locals.
Second, on the part of LPMPC being the primary assembler/processor of pineapple
pulp and fiber, the project provided them additional assured supply of raw materials
for their fiber and pulp-based products enabling them to be more aggressive in
looking for more markets locally and internationally. Aside from the realization of the
cooperative to look closer in the stages of the chain in their own area covered in
order to identify areas for further improvement of efficiency and productivity. Lastly,
for the pineapple industry in Camarines Norte, the project presented an alternative
business and livelihood opportunity thereby contributing to the sustainability and
overall profitability of the industry.
POTENTIAL INTERVENTIONS

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

COCONUT
COIR

COCONUT

32

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

33

COMMODITY PROFILE
Coconut is widely grown in the Philippines but is mostly found in 68 out of 79
provinces in the country covering about 1,195 municipalities. Next to Indonesia, the
Philippines is the worlds second largest producer of coconut. Of the countrys total
arable agricultural area of 12 million hectares, the coconut area shares 27 % or
about 3.258 million hectares although based on its 2006 report, the Bureau of
Agricultural Statistics (BAS) has put the total coconut area at about 3.33 million
hectares.
There are more than 300 million bearing coconuts in the country today. The coconut
palms produce about 14 billion nuts/year at an average of 43 nuts/palm/year. From
1998-2007, coconut production increased at a yearly rate of 2.81 percent. In the last
five years, the average production has reached 2.3 million MT in copra terms. An
average coconut plantation produces about 1.0 metric ton of copra/hectare/year.
The coconut farming sector consists of about 3.5 million coconut farmers who are
either owners, owner/tillers, tenant/tillers or farm workers. Each farm family (an
average size of six) cultivates an average farm holding of 3.6 hectares. Based on a
copra price of P 10.00 per kilo, a coconut farmer earns an average gross annual
income of only P 10,000.00 per hectare which is a way below the poverty line.

34

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

In Bicol, it is one of the major crops grown in all of its


provinces. Regionwide, a total of 648,210 hectares
are planted to coconut with 25% occupied and
actually utilized because of its morphological
features leaving 75% of the coconut land for
diversification. Although the region ranked 4th
nationwide in terms of area planted , the optimum
copra production level per year of 850 kilograms of
copra is low compared to the optimum level of 2-4
tons of copra per year. It turned out that at the
present production level, the farmer earns only
P12,750

per

year

at

P15.00

per

kilo

(www.bicol.da.gov.ph)
With copra as the major source of income of most coconut farmers, the copra
making process uses the coconut meat that makes up only 30% of the fruit. More
often, the remaining 70% of the fruit like husk, shell and water are treated of less value
of as farm wastes. Further, copra drying utilizes only about 50% of the total husk
produced with the excess husks being left in the farm thus creating a problem on
disposal.

Furthermore, husk piles endanger human lives due to the presence of

snakes.
The economic value of coconut husk has now been realized and people are able to
find its long line of uses and applications. The husk is fully of long coarse fibers, running
in one direction. About 30% of the husk is available for fiber extraction, while 70% is
composed of coir dust. Extractible fibers produce both bristle and mattress types.
These are extensively used as raw material for making ropes, rugs and mattress. As a
by-product, coir dusts are used primarily in agricultural applications because of its
inherent water-holding properties. With global concerns for environment-friendly
products, coco coir and other coir-based products have the potential to be export
winners for the Philippines.
Like in all other coconut-growing areas in the Philippines, coconut husks are
considered as farm waste in Bicol Region. However, the region is host to seven (7)
coconut husk processing plants of which three (3) are in Albay, one (1) in Camarines
Sur and three (3) in Sorsogon. An additional of eight (8) coco husk processing plants
are currently being established in the region funded by a

35

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

grant-assistance from Spain through the Agencia Espaola de Cooperacion


Internacional para el Desarrollo (aecid) in support to the Bicol Coco Coir
Grid/Geotextile Production Highway (MTRDP, Bicol Region, CY 2005-2010). The Bicol
Coir Grid Project aims to establish an integrated production and marketing for coco
coir and other coco husk-based products in the Bicol Region.

Investment Area
Farm productivity
Credit and marketing
Post-harvest and processing
Research, development and extension
Infrastructure building and development
Information and technology
Source: www.bicol.da.gov.ph

Production Performance (1999-2008)


Production (1999-2008)
Coconut husk production in Bicol region can be seen as a pattern of booms and
busts for the last ten years (Figure 1).

Lowest production was posted in 1999 at

1,265,559.9 metric tons due to the El Nio weather phenomenon.

However, it

recovered in 2000 with a 23% growth. Declines were again registered in 2001 and
2002. A good performance was attained in 2003 at 1,661,993.133 metric tons, the
highest volume during the decade. Its production in 2004 and 2005 were practically
at the same level but lower than 2003.

The year 2007 was marked with super

typhoons like Milenyo that causes drastic change in coconut production reflecting
only 1,279,143.8 metric tons of coconut husks. It recovered again in 2008 with almost
21% growth. Average growth for the whole decade was at only 3% per annum.

36

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Source: BAS data on coconut production volume converted into coconut husk using
conversion: 1 kg copra = 4 whole nuts; 1 kg husk = 3 whole nuts

Figure 1. Coconut Husk Production Volume, Bicol Region, 1999-2008


Table 1. Volume of Coconut Production, 1999-2008 by Province and Year
1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Region V
(Bicol
Region)

949,170

1,165,456

1,122,499

1,042,786

1,246,495

1,197,506

1,185,327

1,219,374

959,358

1,159,81
0

Albay

156,278

152,043

163,359

179,307

207,158

172,516

183,246

178,852

144,138

149,595

Camarines
Norte

102,982

122,337

145,965

160,998

183,543

205,066

208,889

210,855

214,207

228,772

Camarines
Sur

213,039

326,590

294,854

364,530

423,723

400,468

362,263

383,795

184,116

306,314

Catanduan
es

1,119

1,380

1,308

1,476

2,031

1,854

2,244

2,455

2,449

2,751

Masbate

309,030

360,632

301,413

108,839

194,670

183,430

185,248

221,366

280,716

295,882

Sorsogon

166,722

202,474

215,600

227,636

235,369

234,171

243,436

222,051

133,732

176,496

Coconut

Source: Bureau of Agricultural Statistics (BAS) Copyright: Yes Contact: info@bas.gov.ph Unit: metric tons Matrix: PNVOP101

Table 2. Volume of Coconut Husk Production, 1999-2008 by Province and Year


1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

949,170

1,165,456

1,122,499

1,042,786

1,246,495

1,197,506

1,185,327

1,219,374

959,358

1,159,810

whole nut

3,796,680

4,661,822

4,489,995

4,171,145

4,985,979

4,790,024

4,741,307

4,877,496

3,837,431

4,639,242

Husk

1,265,560

1,553,941

1,496,665

1,390,382

1,661,993

1,596,675

1,580,436

1,625,832

1,279,144

1,546,414

Coconut

Region V (Bicol
Region)

Source: BAS data on coconut production volume converted into coconut husk using
conversion: 1 kg copra = 4 whole nuts; 1 kg husk = 3 whole nuts

Production per Province (2008)

37

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

For CY 2008, coconut husk production is estimated to have reached 1,546,414


tons with Camarines Sur province leading the production with 408,419 tons and
Catanduanes with the lowest, almost negligible amount of 3,668 tons.

Masbate

ranked 2nd with 394, 509 tons, lower by 3.4% with that of Camarines Sur (Figure 2 and
Table 3).

Figure 2. Coconut Husk Production Volume, Bicol Region, per Province, 2008
Table 3. Coconut husk production per Province, 2008
Tons
1,546,414
Region V (Bicol Region)
Albay
199,460
Camarines Norte

305,030

Camarines Sur
Catanduanes
Masbate
Sorsogon

408,419
3,668
394,509
235,328

Area Harvested (1999-2008)


Areas planted to coconut reached the lowest level in 1999 of 364,970 hectares.
Hectarage increased in 2002 through 2008 when it reached its peak at 447,743
hectares. Overall, the average area expansion was 2.3% annually (Figure 3 and
Table 4).

38

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Source: BAS

Figure 3. Coconut Areas, Bicol Region, 1999-2008


Table 4. Area Planted/Harvested of Crops (Other than Palay and Corn), 1990- 2008 by Crop,
Region/Province and Year
1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

364,970

367,245

369,169

389,293

412,504

412,443

415,449

432,620

442,406

447,743

Albay

32,949

34,393

35,321

35,325

41,180

41,180

41,180

41,180

40,180

40,180

Camarines
Norte

89,759

87,500

87,250

84,591

85,146

85,350

85,363

85,365

85,370

85,375

Camarines
Sur

86,038

88,261

89,808

90,200

104,150

104,150

103,726

119,045

119,045

119,045

6,262

6,155

6,126

6,120

8,400

8,135

9,252

11,102

12,500

14,375

Masbate

74,907

75,855

75,930

73,500

75,890

75,890

78,190

78,190

87,573

91,076

Sorsogon

75,055

75,081

74,734

99,557

97,738

97,738

97,738

97,738

97,738

97,692

Coconut

Region V
(Bicol Region)

Catanduanes

Source: BAS

THE PRODUCTION PROCESS


Product/Process Description
Coconut husk is the mesocarp of fibrous covering layer of the coconut fruit which is
about 4-8 cm. thick weighing about 400 grams. The husk of a young coconut is
green; it gradually turns pale brown as the nut matures. In the Philippines, brown husk
is generally used for fiber extraction.

39

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

A. Available Technologies1. Decortication- is the process of extracting and separating the fiber from the
coconut husk. After sprinkling with water or retting the husk, it is fed into a drum
type machine with beater to break the husk. This process of beating is done
twice after which the fibers go to the sifter or rotating wire screen to separate
good fibers. Fibers are then transferred to a turbo cleaner, dried and baled. To a
large extent, sun-drying is used. Decortication yields 30% fiber called coir and 70%
coir dust or coco peat. Coir extracted is of varying lengths. This fiber is classified
as CH3 mattress fiber.
2. Defibering is another fiber extraction process. The process is essentially the
same as decortication. The difference lies in the machine used. A defibering
machine is equipped with spikes that work like combs during the process. Long
fibers are produced and classified as CH1 and CH2.
3. Twining is the process of converting the fibers (CH1/CH2) into yarns or ropes.
The twining process can be done in two (2) ways, to wit:
a)

Mechanical or Motorized Twining

The fibers to be used for twining should contain 15-20% moisture to produce a
semi-permanent curl. The fibers pass through a cleaning machine or rotating
screen to remove the peat; fibers are then passed through a series of grooved
rollers and are attenuated to form a sliver. The fibers then undergo further twisting
with the use of mechanical yarn making or spinning machines to convert slivers
into tightly coiled ropes. Curled ropes are made into coils of 23 kilos each.
b)

Semi-Manual

This method uses light and mobile bicycle -type equipment.

The process is

advantageous since the twine/yarn can be easily produced although the


resulting product quality may not have even thickness unlike those produced
mechanically. This is because feeding of fibers to the twine is not controlled and
weighed.
Two persons are needed to work in this method. One sits at the bicycle or beside
it to pedal. To begin the process, he inserts the fibers onto a hook connected to
the equipment, while the other person, stationed at the front of the one who
pedals, holds and adds fibers to finish the twines.

40

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

The resulting rope/yarn is augmented with more fibers while twining progresses or
until the desired length is attained.

The twines serve as materials for the

production of hand-woven textiles or coir nets or matting.


4. Looming/Weaving- process of making geo-textile nets by weaving twines/yarns or
ropes to a desired specification.
a)

Coir Nets/Mats

The coir twines are woven into coir nets/mats with the use of a handloom similar
to the ones used in weaving native cloths.
The coir twines are tied from end to end in vertical lines at the pikes nailed on the
sides of the loom frame.

With the use of a wooden spindle, coir twines are

inserted horizontally and woven in a crisscrossing manner into vertical twines. The
weaving goes on in this manner until the desired size, length and width of the
geo-textile are arrived at.
b)

Fascines/Bio-logs

Coir twines are hand-woven into high strength nets, formed into tubes with
diameters ranging from 10-12 inches and length from 10-20 meters and filled with
coir and coco peat.
5. Fiber Stitching - The fibers are carried by a conveyor belt unto a sheet-forming
machine where they are spread and formed into sheets.

The sheet is then

transported by a conveyor unto a stitching machine. The stitched sheet will then
be sprayed with latex and dried, and then cut/trimmed into desired sizes.
6. Rubberizing - The fiber undergoes curling after which it is uncurled by an uncurling
machine. The loosened material is fed by a conveyor belt into a machine where
it is formed into sheet. The sheet then passes onto another conveyor with a spray
head where its top surface will be sprayed with a latex solution. After the latex
has been sprayed, the sheet passes through a drying oven.

It will then be

reversed so that the other side will be sprayed with latex, dried and then cut into
desired lengths.

41

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

THE PHILIPPINE STANDARDS FOR COCONUT COIR


Coco Coir
Grade/Classification
1. Bristle Fiber Good (CH1)

2. Bristle Fiber Fair (CH2)

3. Coir Mixed Fiber (CH3)

4. Coir Mattress Fiber (CH4)

5. Coir Wastes (CH5)

Specification/s
The highest grade of fiber; with average
length of 5 inches and more; with no pulp or
dust content; color ranges from light brown to
dark brown and perfectly dried and combed.
The second highest grade of fiber; same
length with that of CH1 but the texture is harsh
with some pulp or dust still present; color is
much darker than CH1 from dull brown to
almost dark brown.
Mixture of bristle and mattress fiber; the length
is 5 inches and below but not shorter than 2.5
inches; color ranges from light brown to dull
brown; texture is medium harsh and generally
crumpled; and with maximum moisture
content of 14%.
Consists mostly of short crumpled
fiber;
average length of not less than 2 inches; same
color as CH3; and it must be free from coir
dust.
Consists of coir dust and reject fibers that
cannot be classified in any of the regular
grades of coir.

MARKET GROWTH
Supply, Demand, Gap
Table 1. World production of coir and coir products (000 MT), 2004-2007
Country
2004
2005
2006
2007
India
362
477
481
486
Indonesia
3
3
8
38
Malaysia
26
23
22
21
Philippines
5
4
8
10
Sri Lanka
177
191
197
231
Thailand
46
50
57
38
Vietnam
0
1
2
3
Total:
620
749
776
827
Source: Road Map of the Philippine Coconut Coir Industry, PCA, March 2009
Table 3. World export of coir and coir products (000 MT), 2004-2007
Country
2004
2005
2006
2007
India
78
81
85
93
Indonesia
1
1
2
8
Malaysia
0
1
4
7
Philippines
5
3
5
5
Sri Lanka
62
55
73
90
Thailand
45
34
34
21
Total:
192
175
204
224
Source: Road Map of the Philippine Coconut Coir Industry, PCA, March 2009
Table 3. World Import of coir and coir products (MT), 2004-2007
Country
2004
2005
2006

2007

42

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

China
84
13
115
144
Netherlands
19
29
34
37
Korea
0
29
0
0
USA
19
22
12
22
Japan
4
20
4
5
Other Countries
71
86
71
88
Total:
197
199
236
296
Source: Road Map of the Philippine Coconut Coir Industry, PCA, March 2009
Table 4. Domestic production of coir (MT), 2004-2008
Region
2004
2005
2006
2007
S. Tagalog
2,755
2,467
2,998
1,540
Bicol
174
62
17
3
W. Visayas
0
0
15
30
C. Visayas
0
0
0
15
E. Visayas
0
41
0
84
W. Mindanao
186
106
132
106
N. Mindanao
0
0
0
221
S. Mindanao
2,002
1,673
4,764
7,963
CARAGA
0
0
0
57
Total:
5,117
4,350
7,926
10,019
Source: Road Map of the Philippine Coconut Coir Industry, PCA, March 2009

2008
2,510
0
0
0
58
0
0
7,415
0
9,983

Table 5. Philippine export of coir fiber (MT), 2004-2008


Destination
2004
2005
2006
2007
2008
Taiwan
2,252
1,196
1,514
1,192
1,420
PROC
1,895
1,105
2,004
3,781
3,290
Korea
202
150
699
33
89
USA
260
158
86
0
44
Japan
228
149
236
69
81
Others
423
530
428
190
901
Total:
5,260
3,288
4,967
5,265
5,825
Source: Road Map of the Philippine Coconut Coir Industry, PCA, March 2009
Other market accounts
National Situation - Status of the Industry
A) Consumption/Demand
Over the past five (5) years, the Philippines produced an average of 7,479 MT of coir.
Of this number, the country exported 4,995 MT of coir as against local consumption
of 2,484 MT. Most of the decorticating plants are located within the Laguna-QuezonBicol and Mindanao areas.

Current indicative prices are as follows:

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

43

Domestic
Fiber:

P 9.50 (Luzon, ex-plant)


P 9.00-10.00/kg. (Vis.-Min, ex-plant)
Plus P 1.00-1.50/kg. delivered

Geotextile:

P 50.00/sq.m.

Exports
Fiber:

Geotextile:

FOB Mindanao:

$230.00 /MT

FOB Manila:

$240.00 /MT

C & F China:

$280.00 /MT

FOB Manila:

$1,300 / MT

B) Inputs/Raw Material Availability


The Philippines is unquestionably the second biggest world husk producer. The
country produces some 12 billion husks annually. Of this volume, an estimated 40% or
4.8 billion husks are available for coir processing distributed as follows: Luzon 24%,
Visayas 17.38%, and Mindanao 58.61%.
C) Processing Equipment/Machines (with approximate cost of investment)

Except for the production of slivers and twines, most coir producers utilize locally
fabricated machines/equipment with indicative prices as follows:

1.

For decorticating operation (5 deco machines shall be clustered and equally


operated by the same number of cooperatives):
a. Decorticating machine

0.750 M x 5

= Ps. 3.750 M

-Output: 1,000 kgs. fiber/8 hr. operation


(wet);(1,000 kgs. X 5 units = 5,000 kgs.)
b. Sifter/revolving screener

0.060 M x 5

= Ps. 0.300 M

-Output: 3,000 kgs. Dust/8 hr. operation


(wet);(3,000 kgs. X 5 units = 15,000 kgs.
c. Baling Press (Low Density)

0.350 M x 5

= Ps. 1.750 M

-Output: 35-40 kgs./bale; 5-6 bales per hour


(40 kgs. X 5 bales x 5 units = 1,000 kgs)
d. Hauling truck

0.700 M x 5

= Ps. 3.750 M

Sub-total
For common service facility to service five (5) deco machines

Ps. 9.550 M

2.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

For Geo-textile Production


2.a.1 Slivering machine, 18 units

0.140 M x 18

= 2.520 M

-Output:220 kgs./unit or 4,000 kgs. for 18 units


2.a.2 Motorized Spinning Machine, 80 units 0.120 M x 80

= 9.600 M

- Output: 50 kgs./unit or 4,000 kgs. for 80 units


2.a.3 Looming Paraphernalia, 67 units 0.050 M x 67

= 3.350 M

- Output: 150 sq.m. of 60k gms. Per


day/unit or 10k sq.m. of 4M gms./
day for 67 units (1 sq.m. = 400 gms.)
Sub-total

Ps. 15.47 M

For Coco Peat Production (sterilized and compacted)


2.b.1 Carbonizer, 1 unit 1.300 M

1.300 M

- Input: 30 tons CS; Output 7.5 tons


CSC (excess heat to be tapped upon carbonizing CSC)
2.b.2 Coco Peat rotating Dryer, 1 unit 0.700

0.700 M

- Output: 12 tons/8hr.-operation
2.b.2.1 Accessories
- Cyclone feeder with rotary 0.200

= 0.200 M

- Washing & Compaction Screw (peat)

= 0.980 M

- Peat Transfer Screw

= 0.280 M

2.b.3 Coco Peat Compactor, 5 units 1.000 x 5

= 5.000 M

- Output: 340 blocks of 5kgs./block/


8-hr. operation/unit or 1,700 blocks
8-hr. operation for 5 units
Sub-total
Total
Add: Baling Press if the common service
facility chooses to export baled coir
Grand Total (With HD baling press)

D) Trading Facilities
a. International Ports

Ps. 8.460 M
Ps. 33.480 M
Ps. 1.250 M
____________
Ps. 34.730 M

44

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

45

The Port of Manila is the countrys premier port of origin. It services coir exporters
located in Luzon and to some extent, the eastern Visayas. It has the lowest freight
cost when compared to other ports outside Manila which are levied arbitrary
charges. Thus, freight costs are normally higher there than in Manila. Said out ports
are as follows:
- Port of Cebu, Cebu City (Region VI, VII & VIII)
- Port of Cagayan, Cagayan de Oro City (Region X, Caraga & ARMM)
- Port of Davao, Davao City (Region XI)
- Port of General Santos, General Santos City (Region XII)
- Port of Zamboanga, Zamboanga City (Region IX & ARMM)
Table 5. Comparative Freight Costs to Xiamen, China (As of March, 2009)
Port of Origin

Container Van/Size

Freight Cost FOB, RP

a. Port of Manila/

20

Port (US$)
150.00

Xiamen
b. Port of Cebu/

40
20

280.00
380.00

Xiamen
c. Port of Davao/

40
20

680.00
580.00

Xiamen
d. Port of Gen. Santos/

40
20

930.00
580.00

Xiamen
e. Port of Zamboanga/

40
20

980.00
924.00

Xiamen
f. Port of Cagayan De Oro City/

40
20

1,822.00
902.00

40

1,775.00

Xiamen

b. Transport System
Raw coir as an export item is bulky, thus the necessity to bale it when transported.
The authorized weight and size of bale for export are 125 kgs./bale and 100 cm. x 55
cm. x 60 cm. or .33 cu.m./bale, respectively.
A 40 container van can load an average of 20 mt. fiber. The existence of RO-RO
carries now in service makes it possible to establish processing plants in island
provinces with good supply of coconut husks. By industry standard, one peso and
fifty centavos (P1.50) per kilo as transport cost is still competitive. The presence of an
efficient road system in the country further affords mobility of products for exports.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

46

c. Infrastructure
Detailed

infrastructure

information

can

be

obtained

from

concerned

regional/provincial offices of the Philippine Coconut Authority, LGUs and the DPWH.
By way of advice, a coir processing plant should be installed in areas with good
network, especially feeder roads around plantations with high concentration of
coconut trees.

Even the processing plant should not be located far away from

international ports of loading. In like manner, the presence of enough source/supply


of power is an important consideration. Equally important is the existence of an
adequate information technology and communication system, basically the
telephone.
d. Organizational Support
Every province has an active coconut farmer organization.

Similarly, there exist

active cooperatives that can be tapped to provide the husk in volumes required by
coir processing plants.
The coir sector is being supported by allied industries such as furniture and bed
industries, organic fertilizer manufacturers, fruits and vegetable plantation farms,
cutflower industry and poultry and livestock raising industries.
e. Job Generation/Farmers Income
A decorticating plant employs six (6) laborers/workers per deco machine. Twining
operation needs an additional 3 workers per twining machine and 2 for geo-textile
weaving.

A total of about 440 jobs created as direct processing plant

supervisors/workers/laborers and 10 indirect employees for this module are


envisaged.

Moreover, there will be more or less 2,100 farm owners/farm

workers/tenants to be identified as coconut husks suppliers as well.


This module is seen to cover a catchment area of 6,250 hectares of cocal land with
available coconut husks for milling at 12,500,000 pieces per year valued at P 3.75
Million (P. 0.30 per piece).
f.

Investment Cost

A simple decorticating plant needs P 1.910 Million capital, excluding land, shed and
working capital. Other activities, including down streaming operations for geo-textile
net and compacted coco peat production require P 34.730 Million.
g. Return On Investment (for decorticating activity
only)

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

47

ROI is 32%, payback period is 2.15 years.


Regional Situation
In a paper entitled Interdependency and More Intensive R&D as Development
Strategy for the Coir Industry in Bicol, E.P. Carba et al estimated that Bicol Region in
2008 used a total only of 9,289,355 kgs. out of the 26,304,978.50 total available husks.
It reflects that there was still a total of 17,015,623.50 kgs. of unused husks. These husks
could have been processed into fiber, thus contributing additional income for the
farmers rather than left to rot in the farm as wastes. (Table 6).
Table 6. Estimated Husk Consumption in Region V
ACTIVITY

Decorticating*
Copra making**
Other use***
TOTAL

ESTIMATED AMT.
OF HUSK NEEDED
(KG)
9,000,000
263,050
26,305
9,289,355

TOTAL AVAILABLE
(KG)

UNUSED
(AVAILABLE
NEEDED, KG)

Unused husks
translates to about
170,156,235 pcs.

26,304,978.50
26,304,978.50

REMARKS

17,015,623.50

* Irregular operation, about 75% only of full capacity


** 1% of husk in the farm
*** 0.1% of husk in the farm

Commodity Flow
Coconut husk gathering is still under strong promotion as of now convincing the
farmers to continuously gather it and bring to the identified decorticators who can
be private institution or the capacitated organizations and cooperatives or can go
directly to processors/traders nearby.
The decorticators will bring the fibers to market players such as Juboken Enterprises,
Inc. The trader/processors have arrangements with markets which can be local or
international markets for geo nets, fiber mats and other coco coir by-products.
(Figure 4).

Local
Markets
Farmer/ Gatherers
Decorticators
(Cooperatives,
Organizations,
Private)

Processor/
Trader

Internationa
l Markets

Based on FGD conducted last January 19 to 31, 2010 of S/VCA Coconut Team of SAIS-BC DA RFU 5

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

48

Figure 4. Commodity flow of coconut husk in Bicol

VALUE CHAIN ANALYSIS


Coconut husk is considered a potential source of income and livelihood among the
local folks.

The coconut coir industry has remained relatively underdeveloped

especially in Bicol. There are seven major players in the local coir and peat industry
in the region of which three (3) are in Albay province, one (1) in Camarines Sur and
three (3) in Sorsogon. Any of the six (6) provinces in the region can singlehandedly
supply all raw material requirements of all these manufacturers but transport cost and
accessibility issues are among the limiting factors that may make such option less
profitable (Carba, et.al., 2008).
Definition of Actors in the Chain
Under the SAIS-BC Project, the following cooperatives are being assisted in coco fiber
production through provision of workshed, set of coco husk processing equipments
and coco husk hauler-truck:
Albay
1. Tastas Farmers Producers Cooperative Tastas, Ligao City
Camarines Sur
2.

Iriga Farmers Development Association, Inc. Brgy. Sta. Elena,

Iriga City
3.

RNAFS Development Cooperative Brgy. Liboro, Ragay,

Camarines Sur
Camarines Norte
4. Basud Coconut & Pineapple Farmers Cooperative
Bgy. Laniton, Basud, Camarines Norte
Sorsogon
5.

Maharlika Development Cooperative


Bgy. San Isidro, Bacon Dist., Sorsogon City
6. Castilla Development Cooperative
Brgy. San Rafael, Castilla, Sorsogon

49

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Masbate
7. Aroroy Coconut Processors Association
Brgy. Bangon, Aroroy, Masbate
8. P4MP Federation - Uson Chapter, Inc.,
Brgy. Quezon, Uson, Masbate
These organizations/cooperatives have their farmer-members as primary suppliers of
coconut husks. As of now, marketing of coir fiber by the SAIS-BC-assisted plants is
anchored with Juboken Enterprises, Inc. with main plant located in Bgy. Gapo,
Camalig, Albay. The capacity of this plant is 3.0 MT fiber/day with 1 unit each of
decorticating and baling machine, 600 units of twining machine and 50 units
looming machines. This processor/trader is linked with markets such as DPWH local
(for coir mats) as erosion control material and bailed fiber sent to other countries
such as Australia.

The marketing arrangement with Juboken Enterprises was

recommended since it is already an established processor and trader of coconut


fiber products and by-products. As the market integrator for the SAIS-BC assisted
plants, Juboken shall have the volume necessary to penetrate and sustain both the
domestic and export markets.
Even with the marketing arrangement with Juboken, other markets will also be
tapped in order to avail of the highest product price that the other market could
offer. Juboken shall exercise its right of first refusal.
For as long as Juboken matches the price offered by other buyers, the products have
to be traded with Juboken.

Table 7. List of Coco Coir Processors and the Capacity of their plant in the Bicol
Region (PCA Region V 2009)
NAME OF PLANT

LOCATION

1. FSSI (formerly Soriano Malilipot, Albay


Fiber Ind.)

CAPACITY
(mt
fiber/day)
No data

EQUIPMENT
QTY/NAME
1 Baling Mach.
___ Twining Mac.
23 Looming/
Weaving Machine

TYPES
Low density
Manual

50

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

2. Bicol Bay Export


Corp.
3. Pilipinas Coconut
Derivative Inc.

Ligao City
(Albay)
Lupi, Camarines
Sur

2.0

2 Decort. Mach.

1.0

4. Pacific Coastal
Coco Coir
Manufacturing
5. Gubat Agritech
Ind.Co.

Tinambac,
Camarines Sur

3.0

Gubat,
Sorsogon

1.0

6. CocoBind Inc.

Irosin, Sorsogon

1.0

2 Lupar Decort.
1 Baling Mach.
50 Twining Mach.
5 Looming Mach.
2 Decort. Mach.
1 Baling Mach.
2 Screener/Sieve
1 Decort. Mach.
1 Baling Mach.
60 Twining Mach.
5 Looming Mach.
1 Decort. Mach.
1 Baling Mach.
35 Twining Mach.
20 Looming Mach.
1 Stitching Mach.
1 Willowing Mach.

1-pass High
Density
2-pass
Low density
Manual
Manual
1-pass
High Density
Motorized
2-pass
Low density
Manual
Manual
2-pass
Low density
Manual
Manual
Motorized
Motorized

Supply/Value Chain Analysis


Cost and Return Analysis
Farm Level (Production)
In the case of a farm in Bibincahan, Sorsogon City, the farmer would harvest every 45
days or 8 times per year. Cost of production per year totalled to P36,371.00 which
already include input costs, equipment (depreciation) and labor costs. Relying only
in copra making would give a gross revenue of P50,400.00 with net income therefore
of P4,029. However, if coconut husks will be gathered and sold (on the assumption
that only 50% will be utilized as fuel for copra making), it would result into additional
income of P1,680.00 per hectare per year and will reflect a total net income of
P5,709.00 per year or a difference of 4% in the farmers income(Table 8).

Table 8. Costs and Return Analysis, Coconut Farm, Bibincahan, Sorsogon


City, CY 2009, MADECO Farmer-Member
Item
EXPENSES (Inputs)
Inputs
Salt Fertilizer
Equipment (materials)
Bolo (dep cost)
Sudsud

Unit

Number

Unit Cost

Cost

bags

225.00

1,125.00

pcs
pcs

5
2

100.00
175.00

500.00
350.00

51

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Tingkalan
Carabao

pcs
head

2
1

8.00
1,000.00

16.00
1,000.00

Tapahan

unit

2,500.00

2,500.00

Sled (carriage)

pcs

350.00

700.00

Sacks

pcs

10

10.00

100.00

2,000.00

16,000.00

16

250.00

4,000.00

Labor
Harvesting
Picking/Gathering
Dehusking

contract

Copra Making
Scooping
Hauling to Farm
Tapahan
Resecada cost (20%)

to

10,080.00

Total Expenses

36,371.00

INCOME
Yield per hectare (copra)
NET INCOME (nuts)
Yield per hectare (husks)
Total Income with Husks

kg
pcs

3360

15.00

50,400.00

0.25

4,029.00
1,680.00
5,709.00

6720

Assumptions:
Bolo with P200 purchasing price each with 2 years life span depreciated straight line method
Sudsud with P350 purchasing price each with 2 years life span depreciated straight line method
Tingkalan with P80 purchasing price each with 10 years life span depreciated straight line method
Carabao at P20,000 with 10 years life span depreciated straight line method
Tapahan at P5000 each with 2 years life span depreciated straight line method
Sled (carriage) at P350 each with 6 mos. life span depreciated straight line method
1500 nuts per harvest x 8 times harvest/year (every 45 days) = 420 kg copra per harvest (28% of nuts)
100 trees per ha with ave. of 15 nuts per tree per harvest
Traded product is copra; Only 50% of total husks
will be traded

Source: Output during FGD at Sorsogon Dairy Farm of S/VCA Coconut Team under SAIS-BC
Project last January 27, 2010.

Processors Level
General cost and return analysis based on the Focused Group Discussion (FGD)
conducted by SAIS-BC and during the Training on Supply/Value Chain of the
commodity resulted that coco coir processing in one month would need 198,000
pcs. of coconut husk.

In the case of Maharlika Development Cooperative

(MADECO), Cost of Production which includes Material Costs, Labor Costs, Marketing

52

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Costs, Overhead Costs, Administrative Costs and Depreciation Costs would result into
a total cost of P157, 882.30. Net income will be P50,017.67 from the gross revenue of
P207, 900 if both coco coir and coco peat will be sold. The value of selling coco coir
is P8.50 per kg and coco peat is 1.00 per kg. (Table 9).

Table 9. Cost and Return Analysis of Coco Coir Processing in One Month, MADECO
Case, CY 2010
1 Month Coco Coir Processing (COST AND RETURN ANALYSIS)
QUANTITY
UNIT
P/UNIT

COST (P)

MATERIALS COSTS
Raw material - Coco husk

198,000

pcs

0.25

49,500.00

132

liters

39.00

5,148.00

1 driver

22

MD

250.00

5,500.00

2 helpers

44

MD

150.00

6,600.00

Hauling cost - Fuel/oil


LABOR COSTS
Hauling Cost

53

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Decorticating cost
2 machine operators

44

MD

250.00

11,000.00

4 helpers

88

MD

150.00

13,200.00

10.00

1,650.00

0.50

9,900.00

MARKETING COST
Used sack

990

pcs

19800

meter

48

liters

39.00

1,872.00

- 1 driver (4 deliveries)

MD

250.00

1,000.00

- 2 helpers (4 deliveries)

MD

150.00

1,200.00

days

100.00

400.00

378.00
210.00

8,316.00
420.00

1 Plant Supervisor

6,000.00

6,000.00

1 Bookkeeper

3,000.00

3,000.00

1 Cashier
Other expenses

5,000.00

5,000.00

Plastic Straw
transportation cost (diesel)
hired labor

Cash point (4 deliveries)


OVERHEAD COSTS (22 days operation)
Electricity
Water

22
2 cu. M.

ADMINISTRATIVE COST

Repair and Maintenance (2% of machine


and equipment)

2,526,000.00

4,210.00

Permit/Registration/License
(P 10000/yr)

833.33

DEPRECIATION
1 Truck(P1.2M, useful life of 10 yrs)

10,000.00

10,000.00

1 @ deco, baling , sieving, pump

826,000.00

6,883.33

6,883.00

1 building

500,000.00

2,083.33

2,083.00

3Phase installation

500,000.00

4,166.67

4,167.00

Total Cost

157,882.33

SALES :
Coco coir

19,800

kg

8.50

168,300.00

Coco peat

39,600

kg

1.00

39,600.00

Gross sales
Net Income/Loss

207,900.00
50,017.67

Source: Output during Training and Workshop of Four Commodities under SAIS-BC Project last
February 16-18, 2010.

Supply Chain Analysis


a. Supply Chain
Input Supply the coconut farms in the area had an average size of one hectare per
farmer. The trees planted are mostly of the Laguna variety. The farmers do not use
fertilizer unless PCA provides salt fertilizer and they do not irrigate. They usually do not
apply chemicals. In cases of severe infestation of cadang-cadang disease, a viroid
disease which cause the lower fronds of coconut to fall off faster than the formation
of new fronds, and nut production to eventually cease three to four years after the
manifestations of the symptoms. Farmers are considered the only supplier of input
with their role as land owners. Labor is always available in the locality. As of now,

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

54

farmers are being encouraged to gather husks through the Cooperatives and
Organizations which eventually will decorticate the husks (Rodriguez, 2008).
Production - the main actors in coconut husks production are the farmers. There are
about 290, 204 coconut farmers in Bicol region. For the whole region, 60% of coconut
farmers are farm-workers, 32% are tenants and only 8% are owner-farmers.
The farmers are considered to have poor agronomic practices with the nonapplication of fertilizers and other practices to enhance productivity. These can be
due to the lack of resources to perform the recommended practices for coconut.
They also do not practice replanting of unproductive coconut trees.
Harvesting cycle is 45-60 days at which they can harvest an average of 4,000 nuts
per hectare for the whole year. On the national average nut trees bear 40 nuts per
tree per year.

Harvesting process is still manual, either by climbing or the more

commonly used, pole method. Labor for harvesting would entail labor for picking,
piling, hauling and husking. Others would just utilize family labor (Rodriguez, 2008).
Part of the farmers role is processing the coconut into copra. It is an inevitable
practice that farmers uses approximately 50% of their husks as fuel during copra
making and the rest goes as wastes.

With the project of SAIS-BC, they are now

beginning to realize the benefits of gathering the husks and selling it out though it is
still in a process of encouraging farmers for the said practice.
Processing (Decorticating) as mentioned, there are seven major players in the local
coir and peat industry in the region of which three (3) are in Albay province, one (1)
in Camarines Sur and three (3) in Sorsogon (Table 6).
The identified and arranged market for the SAIS-BC Project is the Juboken Enterprises
Inc., located at Camalig, Albay with a rated capacity of 3.0 metric tons fiber per
day. The plant however is operating below rated capacity due to limited supply of
husks. This problem can be attributed to poor road network where farms are simply
inaccessible to transport and also to the cost of transporting husk up to plant site.
The buying price in Bicol for husks is P0.25 per piece and P8.50 per kg. of baled fiber.
The waste during decortication which is coco peat can still be sold at P1.00 per kg.
The conversion factor of whole nuts to husk is 33% which means that a kilo of husks
would need 3 whole husks. From husk to fiber, 10 pcs. of husks are required to
produce 1 kg. fiber. Juboken have different markets for decorticated fiber, nets and

55

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

peat. It has market all over the Philippines (for nets), 30 companies in China (for raw
fiber) and markets also in 6 companies in Japan (for dust) and Australia (for dust).
Market There are several channels involved in the market of coconut husks which
starts from the Farmers, then Cooperative/Organization (decorticators) which
eventually, the farmers are members, Processor/Trader like Juboken to the local and
international markets (Figure 5).

Farmer

Cooperative/
Organization
(Decorticator)

Processor/
Trader

Local and
International
Markets

Source: FGD conducted last January 19 to 31, 2010 of S/VCA Coconut Team of SAIS-BC DA RFU 5

Figure 5. Bicol Coconut Husks Marketing Channels, 2010

Farmers Coconut husks are sold by farmers to Cooperatives/Organizations which


eventually they are members for decortications. Farmers are still price-takers on this
scheme. They just accept prices offered by the Coops but eventually they will have
benefits from it being member of the Coops. Coops have already their own strategic
plans on the pick up point of farms then will bring it to the decorticating center of the
Coop.
Cooperatives/Organizations (decorticators) - These coops are assisted by the project
providing them decorticating, bailing, twining and sieving machines.

They buy

coconut husks from the farmers and eventually process it into balied fiber and twined
fibers. Coco peat (considered as waste during decortication) can still be sold out to
the processor.

When the desired volume is attained, they deliver to the

processor/trader like Juboken.


Processor/Trader - Trader seeks to the domestic and export market for fiber, nets,
and peat. As of 2010, Juboken committed to supply China with 2,400 mt/year of raw
fiber, 200 tons of dust and 75,000 sq.m. of net to Japan and average of 250,000
demand for nets of the Department of Public Works and Highways (DPWH) for their
slope repairs. Still, the processors have problems of unmet and committed demands
due to low supply of coconut husks in Bicol Region.
Logistics farm to market roads in the region are almost established already except
from very far and hilly farms which become a hindrance in the gathering and pick up
of coconut husks.

Roads from Coops to Processor and transport facilities are

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

established already.

56

Coops were provided with trucks as part of the SAIS BC

assistance to them. With proper negotiation, processor/trader can be requested to


pick up baled fiber depending on the volume traded by the Coop but buying price
will change (usually lower). Processor/traders have large storage facilities for the
different forms of coconut fiber products.
Value Chain/ Cost Build-up
The Case of Maharlika Development Cooperative (MADECO)
The value chain activities for coconut husk includes four (4) major stages. The first is
raw material supply which includes coconut husks collection usually done by small
coconut farmers and procurement by the decorticators. Next stage will be the coco
coir production by MADECO composed of husk spraying (watering), husk feeding,
coir/peat extraction and decortications.

Next stage will be Primary Processing

comprised of Coir drying, sieving, bailing, weighing, tagging and storing. In this stage,
coco peat drying, weighing, packaging and storing is taking into account.

Last

stage is the Trading/marketing processors with activities on loading, transporting,


unloading and receipt of payment by MADECO (Figure 6).

COCO COIR VALUE CHAIN MAPPING ACTIVITIES

Raw
Materials
supply
Coco husk
collection/
Procurement

Typically
performed by
small coco
farmers

Coco coir
Prodn

Primary
processing

husk
spraying
(watering)
husk
feeding
Coir /peat
extraction/
Decorticating

COIR
drying
Sieving
Baling
Weighing
Tagging
storing
PEAT
Drying
Packing
Weighing
storing

Trading/marketing

Loading/ unloading
transporting
/delivery
RECEIVED PAYMENT

Performed/done by Coco coir personnel/staff


Source: Output during Training and Workshop of Four Commodities under SAIS-BC
Project last February 16-18, 2010.

Figure 6. Coco Coir Value Chain Mapping Activities of MADECO


Value Chain Analysis

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

57

At the MADECOs perspective, being on the trial period and new in the business,
input supply costs P2.50 per kg of coconut husks. Since the husk is picked up by the
coop, it entails logistics costs of P0.87 per kg husk. Production/primary processing
costs P2.62 to produce bailed fiber. Delivery of the products to the trader will entail
P0.81 per kg bailed fiber which totals to P6.80 cost of production. Buying price of
trader is P8.50 per kg bailed fiber. This results to a profit/margin of P1.70 per kg. The
Coop estimates a yield of 19,800 kgs. of fiber from their effective area (Figure 7).
VALUE CHAIN ANALYSIS
INPUT SUPPLY

252.5

LOGISTICS

.87

PRODUCTION/
PRIMARY
PROCESSING

MARKETING

2.62

.81

IPPC
5.99

Total prodn cost


6.80

Yield
19,800

Selling price
8.50

Profit margin
1.7

Figure 7. Value Chain Analysis of Coco Coir Production of MADECO


Cost Build Up
From input supply with the amount of P2.50 per kg husk, logistics for pick up will be
P0.87, at this stage, cost will be P3.37. Primary processing will only costs P0.49 resulting
the costs into P3.83. Marketing costs is equivalent to P0.81 per kg now having cost
build up of P4.67. With buying price of P8.50, cost build up is P3.83. however, there
are still costs under the Coop which are (machine/equipment) depreciation (P1.17
per kg), repair and maintenance (P0.25 per kg) and admin (P0.71) costs. It can be
seen that relatively, cost build up became P5.99. This results then into profit/margin of
P1.70 per kg (Figure 8).

58

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

PROFIT MARGIN

INPUT SUPPLY

LOGISTICS

252.5

.87

PRODUCTION/
PRIMARY
PROCESSING
.49

3.86

3.373.37

COST BUILD UP

FGP
5.99

DEPRECIATION 1.17

Yield
19,800

ADMIN .71

MARKETING
COST

MARKET
PRICE

.81

8.50

4.67

3.83

Repair and maint.


.25

Figure 8. Cost build up of Coco Coir Processing of MADECO


Supply Chain Analysis/Stage Status
The Case of Cooperatives under SAIS-BC
Camarines Sur
1. Iriga Farmers Development Association Stage of Input Supply (coconut husks
collection by coconut farmers as initiated by the Coop)
2. RNAFS Development Cooperative Stage of Input Supply (coconut husks
collection by coconut farmers as initiated by the Coop)
Camarines Norte
3. Basud Coconut & Pineapple Farmers Cooperative Stage of Input Supply
(coconut husks collection by coconut farmers as initiated by the Coop)
4. Castilla Development Cooperative (CADECO) Stage of 1.) Input Supply
(coconut husks collection by coconut farmers as initiated by the Coop); 2.)
Limited Coco coir production (husk spraying-watering, husk feeding, coir/peat
extraction and decortications); 3. Minimal Primary Processing (coir drying,
sieving, bailing, weighing, tagging and storing, also, coco peat drying,
weighing, packaging and storing.

Masbate

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

59

1. Aroroy Coconut Processors Association - Stage of Input Supply (coconut husks


collection by coconut farmers as initiated by the Coop)
5. P4MP Federation Uson Chapter, Inc., - Stage of Input Supply (coconut husks
collection by coconut farmers as initiated by the Coop)
Key Issues on Coco Coir Production

KEY ISSUES
SEGMENT
Raw
material
supply

Coco Husk
Production

Issues
Scarcity of coconut
husk supply due to
existing cultural
practices (e.g., husks
are not gathered
used in other purposes
aside from copra
making)
High fuel costs
low production

high production cost


(electric and fuel
costs and frequent
power interruptions)

. Aroroy Coconut

Recommended Actions
Information dissemination on the potential use of
coconut husk to farmers and strengthening the
farmers organization in order for them to create
strategies in collecting husks (e.g., clustering of
areas and selection of drop/collection points).

Collection of coconut husks should be


synchronized in order to maximize the use of fuel
Improve decortications of fiber through
continuous process research & equipment design
improvement
The coops who opted to decorticate by use of
diesel engine can have higher production costs
but this can be augmented by maximizing
decortication process (e.g., machine in good
condition) and introduce other by-products from
coco coir that can be done for increased income

Processors Inc. as of the


time opted to use diesel
(they bought diesel
engine) for
decortication due to
delays in the installation
of tri-phase electrical
connection.

high maintenance
cost of machinery
and equipment
high risk in machine
operation
inconsistent quality of
fiber
Marketing

Logistics

unsustainable supply
of quality fiber
Marketing price purely
dictated by the buyer
Delayed payment of
buyers
Inventory costs is
higher due to storage
high freight cost (to
Manila)

educate operators on proper utilization and


maintenance of machinery and equipment
enhance safety and efficiency of machine
through training of operators and improvement of
the design of machine/equipment
standardize the processing of coco fiber through
improved decortication and drying to attain
premium quality of fibers
Information dissemination, increase in capital to
provide for more MOOE and trading fund
Strengthen farmers organization to increase
production so that they can avail higher prices
Clear agreement between the coop and the
buyer of payment terms
Quick collection and meeting of volume desired
the soonest to minimize the inventory costs
Maximize volume per delivery

Commodity/Industry Constraints Analysis Along the Chain

60

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

1. Scarcity of Input Supply especially coconut husk supply is the main constraint
in the chain leading to unmet volume of its by-products demanded by the trader;
2. Volume transported during delivery is deemed to be not maximized that can
be due to low available supply of bailed fiber or bulky fibers leading to low
efficiency of transportation costs;
3. Other cooperatives like those in island provinces still have problems marketing
strategies especially on logistics aspect for there are matters to be considered
such as water and land transportation which includes additional fees during the
trucking, maximization of facilities and costs during marketing should be wellstudied to avoid great losses;
4. Power supply problems in other areas hindering the full operation of the
project in the area or others would opt to use diesel engine for decortication; and
5. Strengthening

of

beneficiary

cooperatives/associations

should

still

be

prioritized to let the industry grow and become stable.


Competitive Analysis
The buying price of coconut fiber on the national level is P9.50 compared in the
buying price in Bicol is only P8.50.
indefinite supply reliability.

This can be due to low supply (volume) and

If the cooperatives/associations will have the enough

volume, they can avail higher price from the trader. The quality of coco fiber in Bicol
versus in other regions is almost the same, they vary only in by-products (aside from
the bailed fiber) and packaging which also entails different marketing prices.
Areas for improvement
1. Strengthening and capability building of coops/assoc beneficiary that will lead to
encouragement of coconut farmer to gather their husks for usage of
cooperatives/associations in order to increase the supply of coconut husks for
decortication;
2. Use of high-density bailing machine creating less bulky bailed fiber leading to
maximized transportation costs;
3. Expansion of storage facilities for a more efficient and safe working area;
4. Strengthening the marketing agreements between the coops/assocs and the
trader for a more efficient and cost-effective marketing transactions; and
5. Continue research and development which includes innovation of new products
out of coco husks and also quality improvement to capture other markets.
Impact of SAIS-BC-Provided Interventions

61

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

1.

Additional

income of around P1,680 from husks aside from the income and benefits they
can have being a member of the coop/assoc beneficiary;
2.

Strengthening

and organizing the coops/assoc started already which means that there will be
channels

established

that

will

serve

as

medium/media

for

further

programs/projects of the government especially DA to farmers;


3.

The

provision

of various value-adding equipment and vehicle capacitated the coops/assoc to


process and market by-products from coconut giving them the income initially of
at least P50,000 per month. This amount can still increase depending on the
supply of coconut husks;
SWOT ANALYSIS OF COMMODITY/INDUSTRY
Prospects (Regional Level)
Weaknesses

Failing cooperative movement (less than 1.6% success rate)

Coconut sector still one of the marginalized group in Bicol; benefits from the
industry never really accrued to the poor stakeholders

No continuity of developmental programs due to frequent changes in political


leadership

Industry disorganized; there are many excellent development programs


proposed but none has been willfully pursued

Rapid increase in population especially those of the poor

Threats

Calamities (natural and man-made)

Unstable prices of coconut products; most are price-takers

Localized peace and order problems, insurgency

Increasing and persisting number of debilitating diseases in the rural areas that
hamper farming and drain resources of farmers; health care not so efficient
and frequently not available in the countryside

Unpredictable political climate; corruption

Major Products and Applications


Coir has multiple applications. It covers all the needs from household to industries,
agriculture to technology, and environment to infrastructure.
common uses are:

Among the most

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

62

Upholstery cushion and car seat stuffing, mats, carpets, brush and yarn for
bristle fiber.

Filtration pads, insulation materials, mattresses, rugs, plant/pad liners and as


caulking materials for boats using mattress fiber.

Plant pads which are natural substitutes for sphagnum moss, plastic redwood
and other containers for growing various kinds of outdoor plants.

Rope twines and cordages for agricultural purposes

As geo-textiles or erosion control nets to protect step mountain slopes, road


slopes and river banks against soil erosion. They also provide channel and
shorelines stabilization

Fascines, otherwise known as fiber rolls, bio-logs or gablons, are coir


compressed in tubular fiber nets. They are biodegradable and flexible since
they follow the earths movements.

As mulching materials for plantation crops in form of husk chips.

Coir dust/coco peat is used extensively for horticultural purposes as a


substitute for peat moss and as soil conditioning agent in golf courses and
recreation parks.

Coir dust is best for soil mulching, manure composting,

seedlings and manure composting, seedlings and organic fertilizer.


Other uses of coir dust are as follows:

Fuel

Thermal insulation

Packaging material

Ion exchange resin substitute to treat toxic liquid waste from factories

Alternatives filler during fermentation of residuals into animal feeds

Substitute to carbon filters

Filling materials in the manufacture of panel boards

Cleaning material of oil spills in industrial repair shops

Aside from these applications, coir is now processed into a host of various new
industrial products such as:

Panel board/coir composite panels high density, high performance


binderless boards can be made from pure coconut husk particles utilizing the
lignin component as natural binder.

Cement bonded boards coir can be used as main component of medium


density cement bonded boards for housing and packaging materials

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

63

Concrete rooftile being rust-free makes it suitable for houses along coastal
areas

Alternative to plywood that is made by impregnating a coir mat with phenol


formaldehyde resin and curing it under heat and pressure

Geotextile coir is used as a biodegradable cover for soil while undergoing


revegetation

Vehicle upholstery, stricter free retardancy standards on foam fillings in Europe


opened doors

Insulator pads for exports of fire retardant rubberized coir padding from the
Philiippines

Major importing Countries and Demanded Products


Raw Fiber: Taiwan, China, Hongkong
Coir Dust: South Korea, Japan, Canada
Coir Wastes: South Korea, Taiwan, Japan
Processed Coir: Japan, China, Taiwan
Unexplored & Bright Market Prospects for Coir/By-Products

Mountainous countries with soil erosion/siltation problems

Middle East, Africa, Central Asia and South America with desertification
problems

Urban farming and nurturing of marginal areas for crop production (frontiers of
agricultural production has been decreasing)

Reclamations

Sea farming

CONCLUSIONS AND RECOMMENDATIONS (for Coco Coir)


The interventions provided by the RP-SPAIN SAIS-BC Project empowered the coconut
farmers through the coop/assoc beneficiaries by giving them options of having
additional income aside from copra making. There are further strategies that should
be undergone since coop beneficiaries of the project have different systems and
nature and at the same time, case to case basis problems. There are still coops
that are not operational or operating under rated capacity that should be given
continuing monitoring and assistance from the agency to become full operational.
Other, have developed strategies especially on power usage just to make the
machines operational (e.g., use of diesel machine). In the end, the project still have
given benefits and helped the coconut farmers and cooperatives be more
productive and provided more sources to alleviate their lives.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

64

POTENTIAL INTERVENTIONS
Capacity Development on Improved Production Process this should be prioritized
as an intervention for all the coops/assoc so that they can learn the strategies to be
cost effective and maximize its resources. This can be done through various series of
knowledge/skills training aside from further improvement of facilities and equipment
and to attain high-quality products and eventually to avail better prices.
Value Addition quality control through delivery of properly dried, bailed and
packaged fiber to the trader aside from attaining the desired volume.

In this

manner, the coop can avail better price and avoid losses during transport of the
products
Backward and Forward Linkage - one of the backward intervention that can be
done is through the coconut/farmer members to intensify coconut husks collection in
their own farm, expansion of coconut areas and planting/replanting program to
maximize the yield. In this way, coconut husks that will be gathered is increased and
supply for decortications is available. Forward integration that can be done is the
further processing of coconut fiber into twined and weaved fiber which can avail
higher price of at least P30/m2 versus the bailed fiber of P8.50/kg.
Strengthening and Developing Effective Marketing Strategies
Infrastructure Development storage facilities improvement and expansion for
effective use and security of the processing area are the needs seen now in the
coops/assocs.

Moreover, proper protocol in the processing premises should be

observed to avoid accidents/disasters that may lead to further losses.


Capacity Building there is still a need to strengthen the coop/assoc. beneficiaries of
the project to ensure the life and sustainability not only of the project but of the
cooperative where our farmer-beneficiaries are the members.
Policy Advocacy -

TIME-LINE FOR INTERVENTION


Interventions that can be done should be right after the end of the project,
strengthening of the coops/assoc should be prioritized to create production and

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

65

marketing strategies. And if the coops/assoc are in full operation, improvement of


facilities, machines and equipment can be done.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

66

CASSAVA
CASSAVA
COMMODITY PROFILE
Cassava (Manihot esculenta), locally known as kamoteng kahoy, kawoy or
balinghoy, is the second next to sweet potato, in terms of area harvested

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

67

(hectarage) among the root crops produced in the country. Cassava is grown mostly
in Central Visayas, Bicol, Central Mindanao, Eastern and Western Visayas, Western
and Southern Mindanao, and Southern Tagalog.
A perennial shrub, which sometimes reaches the size of a small tree, is mainly grown
for its tubers which are a rich source of carbohydrates, calcium and ascorbic acid.
The number of roots per plant at harvest varies from 2 to 7 each averaging 27.7 cm.43.3 cm. long and 4.5 cm.-7.4 cm. in diameter are clustered around the base of the
plant and extends about 60 cm on all sides. Under favorable conditions, a single root
may weigh as much as 4 kilograms and contains about 15%-40% starch.
VARIETIES
There are several varieties of cassava grown in the country, but commercially, the
following are recommended: Lakan 1 (fresh root yield: 32 tons per hectare), Sultan 6
(39.1 tons per hectare), Sultan 7 (37.9 tons per hectare), Rajah 3 (37 tons per
hectare), and Sultan 10 (40 tons per hectare). Sultan 6, Sultan 7, and Sultan 10 are
industrial types suitable for starch and feed production while Lakan 1 and Rajah 3 are
both all-purpose types appropriate for food, starch, and feed production.
USES OF CASSAVA
Although it is not the staple of Filipinos, one of major utilization of cassava is for food
which includes confectionaries and native pastries like suman, bibingka and
sago. Another important product is starch which is extracted from the tuber and
known in the world trade as tapioca flour. It is used by different industries for
pharmaceutical products, paper, adhesive, textile, mining, etc...

In the food industry alone, the uses for cassava flour are numerous. Studies have
shown that cassava flour can substitute for wheat flour in baked products, as much
as 10% in bread and can be higher in other baked products. It is utilized as thickener
for soups, baby food, sauces and gravies. Cassava flour is excellent filler that could
supplement the solid contents of ice cream. It is also a good binder for sausages and
other processed meat products to prevent these from drying up during cooking.
The use of cassava as livestock feed in the country have shown that it can be used
as a substitute for feed grains in compounded animal rations. On the other hand,
cassava leaf meal contains 18-20% protein, so that it is a good livestock feed not only
for poultry but also for other livestock.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

68

Cassava can also be a good solution to the problems of climate change and fuel
shortage. In China, Thailand, and Brazil, cassava is becoming an important biofuel
crop. A feasibility study has found that cassava has a very high starch-to-sugar
conversion ratio. This high starch content means that a high percentage of sugar can
be converted from it, and which, in turn, is needed to produce biofuel.
PRODUCTION PROCESS
Growing cassava entails simple farm operations such as land preparation, planting,
replanting, weeding, fertilization, irrigation, and harvesting. Small scale production
requires 51 man-days to operate a hectare of land. The plantation type of
production needs 55 man-days per hectare to undertake all the necessary farm
operations.
Site Selection. Cassava is a tropical and subtropical plant and it grows in areas with
more or less evenly distributed rainfall throughout the year with an ambient
temperature that ranges from 25-30 degrees centigrade. In the Philippines, cassava is
best grown in deep soil with friable structure such as light sandy loams of medium
fertility. Top soil should be 30 centimeters in depth. Successful use of almost all soil
types is possible, provided that they are not waterlogged, shallow or stony. It thrives
at 845 meters above sea level in fertile soil with pH range of 5.5-6.5 and grows best
when planted at the start of the rainy season.

Land Preparation. The field is plowed and harrowed once when using a tractor.
However, when using an animal-drawn implement, the field is harrowed twice.
Ridges are constructed at one meter apart. Fifty bags (good for one hectare) of
compost or dried animal manure are incorporated to the soil during land
preparation.

Planting. Cassava stalks are commonly used as planting materials that are less than
eight months old, and free from insect pests and diseases. These are cut at 20-25
centimeters long and are stored in a cool shaded place that can last up to three
months. But for better germination, the cuttings are planted as soon as possible.
Cuttings from the base of the stalk are better planting materials than those from the
top in terms of germination and starch yield.
These are planted at a distance of one meter between ridges and 0.75 meter
between hills. They can be planted horizontally, vertically (where 3-5 centimeters is
left uncovered), or slightly inclined. Horizontally is recommended in relatively dry field,
vertically in very wet soil or during rainy season, and slightly-inclined in a soil with near

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

69

optimum moisture.During dry season, the cuttings are planted in furrows while on the
ridges during rainy season. Missing hills should be replanted two weeks after planting.

Fertilization. Six bags of complete fertilizer (14-14-14) are applied (basal) before
planting. The fertilizer is covered with a thin layer of soil. Two months after planting,
the crops are side dressed with two bags of urea (46-0-0). The fertilizer is placed in
band 15 centimeters away from the base of each plant.

Irrigation. After doing fertilization, the field is immediately irrigated to dissolve the
fertilizer. Irrigation is highly recommended thereafter, during the first three months
after planting during dry season. During the rainy season, irrigation is needed only
when necessary.

Weeding/Cultivation. During the first two months, weeding is recommended. Offbar cultivation is required 3-4 weeks after planting followed by hill-up 2-4 weeks later.
After the second month of crop establishment, weeding is no longer required.
Uprooting or cutting off tall weeds is all needed.

Harvesting. The tubers are harvested manually if the soil is friable or animal-drawn
plow may be employed passing at the sides of the plant to break the soil. In slightly
hard soil, a bar is used to dig the soil and to serve as lever. Harvesting can be done
eight months after planting, and it is advised that partial sampling is done to
determine if the roots are mature enough to be harvested. If harvesting is done by
hand, the stems are cut first, leaving a portion at the base of the plant to serve as
handle to pull the storage root up. The storage roots are detached from the stem
using a sharp bolo. Soil sticking on the roots is removed using a stick. The harvested
tubers must be sold immediately; if not, they must be stored in a shaded place.
Cassava Processing. About twenty three per cent of total cassava harvest is lost due
to the fast deterioration caused by bruises and cuts inflected during harvesting. At
present, the most feasible solution is the immediate processing of the tubers right
after harvest. There have been efforts to prolong its shelf-life like the use of
appropriate packaging mediums, controlled conditions, etc., but none of them has
been considered completely successful. Producing dried granules or chips from fresh
cassava roots involved the following basic processes: peeling/trimming, washing,
grating, spinning, pulverizing/ finishing, drying, and packing.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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For animal feed processing, cassava is traded as dried chips in pellet and granule
forms which is required by industrial buyers. The primary processing of cassava roots
usually involves the use of granulating and chipping machines which are currently
done on the village level. Dried cassava is at present in demand as an important
ingredient for animal feeds and feedmillers and manufacturers buy them in different
forms depending upon their specifications.
When the roots are chipped or granulated , they undergo the drying process.
Sundrying remains the simplest and cheapest way of drying. To prevent browning,
the chips or granules are submerged in boiling water for three to five minutes. These
are then spread on mats or concrete floor and expose for two to three sunny days to
reduce moisture content to 10-20 per cent. When it rains, the use of artificial dryer is
advised. Dried chips or granules can be stored for three to six months before selling to
feed manufacturers. To avoid deterioration producers sell them immediately after
processing.
Animal fed for domestic marketing or for export must have the best quality to pass
standards of buyers and middlemen. Good quality chips should have a moisture
content 12 to 14 per cent and the color should be light. They should also be free from
repulsive odor and foreign matter. Simple processes allowing farmers to convert the
highly perishable cassava roots into dry, easily stored, and freely traded commodities
are available. Improved cassava processing equipment has been designed and
tested by research institutions for use at farm and village levels. The equipment
reduces post harvest losses, increase labour productivity, and improve product
quality.
MARKET GROWTH AND TREND
Production Supply
In 2008, Bicol Region ranks third in terms of cassava production which contributed
about six percent (5.8 %) to the total volume produced in the country (Figure 1).
Regions 10 and ARMM consecutively contributes the largest share. Their combined
production accounts for almost seventy percent (70%) of all total in the same year.
Other regions with significant cassava production in decreasing order are Central
Visayas, Calabarzon, Eastern Visayas and Western Visayas.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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Source: BAS
Figure 1. Volume of Cassava Production in Metric Tons by region, January to December 2008

Source: BAS
Figure 2. Volume of Production and Area Harvested in Bicol Region, 1999 to 2009

The production of cassava in Bicol Region decreased from 179,728 mt in 1999 to


115,112 mt in 2009 while area harvested also declined from 29,590 to 22,697 hectares
comparing the same period (Figure 2).
The provinces of Albay, Camarines Sur and Catanduanes showed the sharpest
declines in terms of productivity which was at the range of 36 to 47 % (Figure 3).
Despite the increase in production from other provinces, productivity was greatly
reduced because in Camarines Sur alone, which has almost 22, 746 hectares of area
harvested or 77% of the total regional cassava area in 1999 was reduced to only 16,
724 hectares within a decade (Figure 4).

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

72

Source: BAS

Figure 3. Volume of Production per Province in Bicol Region, 1999 to 2009

Despite the decline in area harvested, which contributed largely to the reduction in
productivity, Table 5 shows that yield per hectare in four province and as well as for
the whole region performed otherwise considering the same period. Except for
Catanduanes and Camarines Sur all other provinces exhibited an increase in
average yield but the increase of about seven percent (7%) from 2000 to 2009
however, was not very significant to spur-up the overall regional productivity as a
whole. The decline in production can mainly be attributed to the twenty percent
(20%) drop in yield per hectare particularly in Camarines Sur that has the largest area
and contribution to the total volume produced per year.

Source: BAS

Figure 4. Area Harvested per Province in Bicol Region, 1999 to 2009

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

73

Source: BAS
Figure 5. Average Yield per Hectare of Cassava in Bicol and all provinces, 2000 to 2009

Sufficiency, Demand and Utilization


According to Philippine Cassava Starch Millers Association (PCSMA), the Philippines
imported a total of 40,068 MT of cassava starch, valued at US$15.60 million from
Thailand and Vietnam in 2008 , which can be considered an opportunity loss for the
Filipino cassava farmers because this volume can in fact be produced locally by only
increasing cassava production areas, especially in Mindanao and Visayas where
underutilized mills are located.
In Bicol Region, similar to the national scenario, production was not able to meet the
quantity demanded, specifically for food as shown in Table 1, for the past three
years. Food sufficiency ratio, on the average, was only at about seventy five percent
(75%) or lower. This means that cassava production has a potential market even for
food utilization alone without considering other demands for the product for feed,
biofuel and non-food use or processing. Referring also to the same table, the island
provinces of Masbate and Catanduanes poses the lowest sufficiency while
Camarines Sur exhibited the highest sufficiency level at 227 percent in 2009.
Figure 6, on the other hand, shows that the highest food sufficiency level for the past
six (6) years was attained in 2006 where in it reached around ninety five percent
(95.3%). The fluctuation in sufficiency level is mainly due the changes in quantity
produced rather than in the demand side because as shown in Figure 8, the food
demand from 2004 to 2009 did not notably increased. The sudden increase in
sufficiency level in 2006 can be attributed to the shift in utilization from feed to more
on food use as also shown in the same figure. In terms of utilization distribution, nonfood use accounts for more than half (at 57%) followed by processed and
unprocessed and processed food respectively (20% and 17%) while feed utilization is
only around 6% in 2009 (Figure 7).

Table 1. CY 2007-09 Cassava Food Sufficiency Ratio, by province in Bicol Region


(BAS)

PROVINCE
Allay
Camarines Norte
Camarines Sur

2007
98.30
68.28
216.49

2008
98.46
63.66
224.49

2009
95.44
63.25
227.08

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Catanduanes
Masbate
Sorsogon
BICOL REGION

3.82
3.69
31.91
73.18

3.68
3.74
30.26
74.70

3.45
3.86
29.23
74.87

Figure 6. Food Sufficiency Ratio in Bicol Region, 2004 to 2009

Figure 7. 2009 Utilization Accounts for Cassava in Bicol Region

74

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

75

Figure 8.Feed/Waste Utilization and Total Food Demand in Bicol Region, 2004 to 2009

Projected Market Demand and Product Potentials


Despite the low cassava productivity, which may be attributed to the fact that the
crop is traditionally grown with minimal farm inputs, its potential, both in yield as well
as market prospect has not yet been fully explored or attained. More recently, it has
gained importance as a possible fuel commodity not only in the Philippines but also
in China, Thailand, Indonesia, and other countries which have more advanced
national biofuel programs.
The major market for cassava in the region are mainly Cooperatives engaged in
trading and marketing and private feedmillers and processors namely Miraya
Development Cooperative (Albay), Calabanga Liga ng mga Barangay MultiPurpose Cooperative, Maymatan Farmers Multi- Purpose Cooperative and KolbiSupra. Table 2 shows the projected demand for fresh roots in the next five (5) years
which forecast the relative rate of increase in quantity required in the different
sectors. It is expected that the largest market will be for feeds, followed by food, bio
ethanol and starch respectively.
Cassava, among others, is also one of the crops mentioned in the Biofuel Act as a
possible source of biofuel. Given the prospect of attaining optimal productivity
(through fertilization, irrigation use of improved varieties that can reach up to 20 to 40
tons/ha/yr), ethanol yield from cassava becomes comparably better than those
from other feedstock such as sugarcane or sweet sorghum. Improved production
efficiency in the future can lead to increased profitability for farmers by tapping the
existing and potential local and export markets.
Table 2. CY 2010-14 Projected Demand and Utilization for Fresh Cassava Roots in Bicol
Region (GMA Corn Program PlanningWorkshop)

FOOD

Projected Demand for FRESH ROOTS (000MT)


2010
2011
2012
2013
2014
654
784
944
1,124
1,334

FEEDS

4,000

4,800

5,760

6,912

8,294

BIO-ETHANOL

50

220

440

440

440

STARCH

312

328

344

361

379

TOTAL

5,016

6,132

7,448

8,820

10,447

SECTOR

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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Commodity Flow
Cassava farmers deal with at least three type of traders; the wholesalers, wholesalerretailers and retailers.

Grading is used to sort out three classes of cassava, the

biggest and the medium sizes are sold to traders while the smallest or lowest class,
usually not saleable is normally given away or used as feeds. The all in basis (halohalo) mode of selling is more predominant.

The perception of a good quality

cassava is based on the buyers choice, that is bigger in size, fresh and free from
rotting.
Farmers usually sell cassava by sacks or cans.

An average content of a sack is

equivalent to 4 cans, whether the farmers sell to wholesalers or retailers, the mode of
payment is cash or 2-3 days credit. Consignment basis is sometime mutually agreed
upon but a cash advance is invariably given by the buyer.

Farmer-Producer

WholesalerContract Buyer

Wholesaler/
Retailer

Cake Maker

Retailer

Consumer

Cake Maker

Consumer
Figure 9. The commodity flow from farmer-producer
to consumer
PRICES
Pricing is based on the volume of production as well as the supply and demand in
the market and not on the variety.
For the last three (3) years, (2001-2003) the price of cassava is stable. Average farm
gate prices showed a decreasing trend from P3.48 per kilo in 2001 to P3.12 per kilo in
2003. The province of Albay registered the highest price per kilo of Ps. 3.19 and the
lowest is Camarines Norte with P2.73 per kilo in 2003.
This is because of the big volume available in the province brought about by the
program of the Provincial Government of Camarines Norte extending financial
assistance to cassava farmers.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

77

Supply/Value Chain Analysis


Cost and Return Analysis
Farm Level (Production)
In the case of a farm in Goa, Camarines Sur, the farmer would harvest after 9 months
which means once a year only, others can maximize it of 3 cropping per 2 years (8
months per cropping). Cost of production per hectare cropping per year totaled to
P20, 525.00 which already include input costs, labor costs, land rental and logistics.
Relying only in fresh tubers give a gross revenue of P41,250.00 with net income
therefore of P20,725 (Table 3).

Table 3. Costs and Return Analysis, Cassava Farm, Goa, Camarines Sur, CY 2009,
Maymatan Multipurpose Cooperative Farmer-Member
Item
EXPENSES
Materials
Planting Materials
Organic Fertilizer
Sacks
Labor
Production
Clearing
Land Preparation (Tractor)
Plowing/Harrowing
Furrowing, making plots
Preparation of planting materials
(cutting)
Planting
Fertilizer Application
Weeding
Hilling Up

Unit

Number

pcs
Bag
Pcs

2,500
10
300

1.00
80.00
7.00

2,500.00
800.00
2,100.00

md

150.00

900.00

hr
mad
md

2.25
1
2

1,300.00
250.00
150.00

2,925.00
250.00
300.00

md
md
md
mad

4
1
8
2

150.00
150.00
150.00
250.00

600.00
150.00
1,200.00
500.00

Unit Cost

Cost

78

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Spot Weeding
Harvesting
Other expenses
Land Rental (if any)
Logistics
Transport of planting materials (ex. 3-km)

md
md

4
8

150.00
150.00

600.00
1,200.00

ha

2,500.00

2,500.00

250

2.0
0
0.2

500.00
500.00

lump

Loading of Fresh Tubers in Truck


Transport of Fresh Tubers to Coop
(15-km)
Total Expenses
Revenue
NET INCOME

kgs

15,000

3,000.00

0
20,525.00

kgs

2.7
5

15000

41,250.00
20,725.00

Source: Output during Training and Workshop of Four Commodities under SAIS-BC Project last February 16-18, 2010.

Processors Level
General cost and return analysis based on the Workshop during Training on
Supply/Value Chain of the commodity resulted that cassava processing for 1 hectare
equivalent to 15000 kgs of fresh tubers wherein in the case of Maymatan
Multipurpose Cooperative, Cost of Production which includes Material Costs, Labor
Costs, Marketing Costs, Overhead Costs, Administrative Costs and Depreciation Costs
would result into a total cost of P48,721.00. Net income will be only P3,804.00 from
the gross revenue of P52,525.00 sold as granulated cassava. The value of selling
granulated cassava P9.00 per kg. Marketing costs will further incur expenses of P986
for the 5,000 kgs granulated cassava out of the 15,000 kgs fresh tubers which make
the net income P2,818.00 for the said volume of processed tubers (Table 4).

Table 4. Costs and Return Analysis, Cassava Farm, Goa, Camarines Sur, CY 2009, Maymatan
Multipurpose Cooperative Processor
Item
Unit
Number Unit Cost
Cost
Fresh Tubers

kgs

15,000

2.75

41,250.00

Unloading/Weighing of Fresh Tubers

sack

300

2.00

600.00

Loading

sack

300

1.50

450.00

sack

300

1.50

450.00

lit

18

34.00

612.00

md

150.00

900.00

Labor

Unloading of Fresh Tubers


Processing
Fuel for granulator
Granulation
Drying/Sacking/Piling

md

18

150.00

2,700.00

Sacks

pcs

117

7.00

819.00

Driver

trip

90.00

90.00

Fuel

trip

300.00

Logistics
Transport of Fresh Tubers to Processing Area

TOTAL COST FOR 15 TONS


Revenue

300.00
48,171.00

kgs

5250

9.00

47,250.00

79

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

kgs

525

9.00

4,725.00
51,975.00
3,804.00

NET INCOME before marketing


Marketing (good for 5 tons)
Transport of products to market
Loading (45 KG/BAG)
Truckscale

bag

111

1.00

111.00

truck

0.25

200.00

50.00

day
day
day

0.75
0.75
0.75

250.00
150.00
200.00

187.50
112.50
150.00

Trucking Cost
Driver
Helper
Allowance
Fuel

375.00
986.00

TOTAL COST FOR 5 TONS

NET INCOME
2,818.00
Source: Output during Training and Workshop of Four Commodities under SAIS-BC Project last February
16-18, 2010.

Supply Chain Analysis


a. Supply Chain
Input Supply the cassava farms had an average size of one hectare per farmer.
The varieties planted are mostly Golden Yellow and Lakan 2 White. Some planted
also the newly recommended high yielding varieties such as Sultan 7 and Lakan 1
Yellow.

Most of the farmers seldomly use inorganic/synthetic fertilizers and do not

irrigate though it is recommended to use fertilizers to attain higher yield. Farmers are
considered the only supplier of input, the fresh tubers, with their role as land owners
and/or tenants. Labor is always available in the locality.
Production - the main actors in cassava production are the farmers. There are about
22, 697 hectares planted in Bicol region (BAS 2009).

The farmers are considered to

have poor agronomic practices with the non-application of fertilizers and other
practices to enhance farm productivity.

These can be due to the lack of resources

to perform the recommended practices for cassava. Although, other trained coop
applies organic and chemical fertilizers like complete, urea, and amophos.

They

also do not practice crop rotation to improve the soil condition for cassava
production.
Harvesting period is from 8-12 moths at which they can harvest an average of 5.21
tons per hectare per cropping/year, on the national average is 9.46 tons per hectare
per year. Harvesting process is still manual, but it is recommended to use cassava
lifter when the stem is hard to lift. Labor for harvesting would entail labor either by
animal drawn implement or hand lifting, hauling, and cutting of both ends of tubers
ready for processing. Others would just utilize family labor.

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Processing
From harvest, the process begins with granulating which tubers cut into small pieces
including its bark, then drying and bagging. In granulating it uses the granulating or
chipping machines.
days.

Cassava granules/chips mostly dry in drying pavement for 2-3

During rainy season, drying facilities such as solar air-tent type dryer, cocum

dryer, and binafor type dryers are being used. No mechanical dryers efficiently used
in drying due to high energy cost.
Market There are 2 channels involved in the market of dried granules which starts
from the Farmers, to Coop/SMC Assembler, then SMC SMFI with one BMEG Buying
Station in Bicol.

Coop buyers may go directly to BMEG or will still pass through

assemblers. Farmers have two options also which is marketing the tubers to Coop
buyer or to the assemblers (Figure 10).

Farmer

Coop. Buyer

Assembler

BMEG SMFi

Source: Personal interview with Farmers Coop, SMC Assembler, SMC Representative
for Bicol, and Regional Cassava Focal Person, March 2010

Figure 10. Bicol Cassava Marketing Channels (Maymatan Model), 2009

Farmers cassava tubers are sold by farmers to coop usually for processing into feed
ingredient for hog, poultry, cattle, and fish.

Farmers are price-takers. They just

accept prices offered by coop or SMC Assemblers, which dictate the value of fresh
tubers (with deduction in weight of about 10% or depending on the MC). They
produce depending on what they can only harvest from the farm and not on market
demand.
Coop Buyer - The coop buyers, in case of Maymatan Coop who are, at the same
time, the assemblers, either have the tubers delivered to them by farmers or the usual
practice is for them to pick up the tubers at P0.20/kg. in 15-km distance. Most of the
coop buyers have their own granulating/chipping machines availed from DA and
warehouse and drying facilities to attain good quality granules. When the desired
volume is attained, they deliver to BMEG Plants.
SMC Assembler - are buyers accredited by SMFi either buy fresh tubers from farmers
or dried granules from the farmers coop/assoc., the producers. The SMC Assembler
has certain paid-up capital for buying the processed cassava. The acceptable MC
is about 12-14% being determined using the moisture meter.

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Logistics farm to market roads in the region are almost established already except
from very far and hilly farms which requires the farmers to have carabaos that will pull
the carts/carriages to carry the tubers. Coop buyers have their transport facilities or
they just hire small trucks in bringing the tubers to the processing areas. Coop buyers
usually have their storage facilities as well as trucks used in the delivery of cassava.
a.1. Value Chain/ Cost Build-up
The Case of Maymatan Multipurpose Cooperative
The value chain activities for cassava includes five (5) major stages. The first is input
supply which includes purchase of planting materials, organic fertilizers and sacks.
Next stage will be the farm production composed of clearing, plowing/harrowing,
furrowing, planting material preparation, planting, fertilizer application, weeding,
hilling-up, spot weeding, harvesting. There are also other expenses under this stage
which are planting materials transportation, loading of fresh tubers, transportation of
fresh tubers from farm to cooperative, food for labor and land rental. Another stage
is primary processing which includes costs for unloading/weighing, loading,
transportation to processing area, unloading of fresh tubers, drying/sacking/piling. At
this stage though there are still costs not assumed which are administrative costs and
repair and maintenance of equipment. Fourth stage incurs costs such as loading to
truck, payment for truckscale, driver, helper, allowance and fuel.
marketing wherein dried granules is sold at P9.00 per kg. (Figure 11).

Last stage is

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Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
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VALUE CHAIN M AP

INPUT
SUPPLY

FARM
PRODUCTION

PRIMARY PROCE SSING

TRADING

MARKET

PLTNG MATLS

CLEARING

UNLOADING/W EIGHING

0.48
ORG FERTLZR
0.15
SACK
0.40

LOADING TO TRUCK

DRIED GRANULE S

0.17

0.11

0.02

9.00

PLOWING/HARRW NG

LOADING

TRUCKSC ALE

0.56

0.09

0.01

FURROWING

TRANS TO PROCNG AREA

DRIVER

0.05

0.07

0.04

PLTNG MATL PREP

UNLOADING OF FT

HELPER

0.06

0.09

0.02

PLANTING

GRANULATION

ALOWANCE

0.11

0.17

0.03

FERTLZR APPLICTN

DRYING/SACKING/PILING

0.03

0.51

WE EDING

DEP

0.23

0.00

HILLING-UP

ADMIN. COST

0.10

0.00

SPOT WEEDING

R&M

0.11

0.00

FUEL
0.08

HARVESTING
0.23
OTHER EXPENSES
PLTNG MAT TRANS
0.10
LOADING OF FT
0.10
FT TRANS TO COOP
0.57
FOOD FOR LABOR (F)
0.00
LAND RE NTAL
0.48

Source: Output during Training and Workshop of Four Commodities under SAIS-BC Project last February
16-18, 2010.

Figure 11. Cassava Value Chain Mapping Activities of Maymatan Multipurpose


Cooperative

Value Chain Analysis

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From the farm, the farmer shoulders the cost of transport of planting materials
amounting to P0.10 per kg. The cost build-up at this level reached P2.13 per kg.
Cooperative buyers also incur cost of P0.07 per kg in transporting of fresh tubers to
the processing area, this time cost build-up is P3.32 per kg. The coop which is the
processor process the fresh tubers into dried granules cost to about P1.73 per kg. The
cassava rootcrop granulator is used in processing with their drying facilities such
concrete drying pavements.

They will further incur a cost of P0.20 per kg in

transporting the dried granules to the BMEG Plant which is the major buyer of the
finished product, the dried cassava granules.

From the coop selling price of

P9.00/kg, the coop shall earn a profit of P0.64/kg.


The use of 10 bags Organic Fertilizer or chemical (2 bags complete and 1 bag Urea)
will lead to additional cost of P0.15 per kg from the labor cost of P2.12 per kg with
logistics of P0.10/kg resulting to total farm gate cost of 3.24 per kg. Farmers will not
earn if the buying price of coop is only be P2.25 per kg with yield of 15,000 metric
tons per hectare, but if yield is higher the profit will increase.
Fertilizer costs will be lowered if the coop will produce their own organic fertilizer.
With this, the coop shall avail the organic fertilizer plant project from BSWM which
one of the government interventions introduced to the coop, the cost of fertilizer will
reduced by P20.00/bag from the price of P80/bag to P60/bag.
Another intervention is the provision of 10,000 bags capacity warehouse that will
protect the product from deterioration which consequently reduces its quality and
weight from 15% to 20%. And the 1,000 bag capacity concrete drying pavement
from SAIS-BC which reduces drying rental fee to farmers by 40%.
Also transport cost is reduced by 30% than truck rental with the provision of hauling
truck for the project. Considering only cost of fuel, 1 driver, and 2 helpers.
Key Cost Drivers
Production if the cost of sacks will be imputed in the overall cost of production, it
will contribute approximately Php 0.14 in the cost of production. Since Maymatan
practice in procurement of fresh tubers does not need sack, it reduces labor on
loading and unloading in sacks. The farmers uses sacks in delivery of tubers but it will
be reused for the next harvest, this is why the cost of sack for farmers reduced to
50%.

The total requirement of sacks for 15,000 kgs fresh tubers per hectare is 300

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Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

pcs, in case of Maymatan collection practices, no sacks being used, in case of


farmer who delivered tubers to Maymatan, sacks were returned to farmers.
Processing - labor cost in drying, bagging, and piling if imputed in the processing
cost, it will contribute P0.51 per kg.

In drying, labor cost will reduced through the

provision of concrete drying pavement, more likely if efficient mechanical dryer is


used. Labor in bagging is also reduced with the used of bag closer provided in the
project. While, labor in piling will also reduced due to the provision of warehouse for
proper storage. In this way, the movement of pile in one open area to another area
will reduced cost.
Marketing - Hauling in delivery of processed products if imputed in the marketing
cost, it will contribute the amount of P0.20/kg.

Hauling cost will reduced with the

provision of truck rather than truck rental. The sack used in delivery will not return to
the coop, thus it contributed the amount of P0.40 if imputed in the marketing cost.
Since the requirement of 15,000 kilos if processed is 5,250 kgs considering the 35% dry
matter content of the finished product.

If computed the number of sacks required

given the 50kg/sack is 105 pcs only the cost of sack is reduced by almost 50%. Thats
why, the amount of sacks required in marketing is more than a half of the sacks
required in production and processing.

Inputs

Logistics

Farm
Production

Logistics

Processing

Logistics

Market

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Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Cost:
P1.03/kg
tubers

Cost:
P0.10/kg
tubers

Cost:
P2.12/ kg
tubers

Farmgate
Cost:
P3.25/kg

Cost:
P0.07/kg
tubers

Yield:
15,000 kg

Farmers
Total
Cost:
P3.32/kg

Cost:
P1.73/kg
granules

Cost:
P0.20/kg
granules

Farmers
Selling
Price:
P6.43/kg

Coop
Total
Cost:
P8.36/kg

Margin:
P3.11/kg

Coop
Selling
Price:
P9.00/kg

SMC
Buying
Price:
P9.00/k
g

Margin:
P0.64/kg
Source: Personal interviews with cassava coop farmers, Bicol, February 2010

Figure 12. CASSAVA (tubers) TYPICAL FARM: Agri Food Supply/Value Chain (Cost
Build-up), Bicol, Philippines, 2010*

Supply Chain Analysis/Stage Status


The Case of Cooperatives under SAIS-BC
Camarines Sur
1. Liga ng mga Barangay Multipurpose Cooperative - Stage of Input Supply
(was able to process and market before but the system was not sustained
starting again into production to have enough supply)
2. Maymatan Farmers Multipurpose Cooperative Stage of 1.) Input Supply, 2.)
Farm Production, 3.) Primary Processing, 4.) Trading and 5.) Market
Sorsogon
3. Castilla Cassava Farmers Association - Stage of Input Supply (was able to
process and market before but was not sustained due to reorganization)

Masbate
4. Cataingan Cassava Farmers Association - Stage of Input Supply (production
being intensified as of now for a sustained production and processing)

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Under the RP-SPAIN, SAIS-BC Project

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5. Cawayan Cassava Planters Association - Stage of Input Supply (production


being intensified as of now for a sustained production and processing target
area of production = 80 hectares)
6. Mauswagon Credit Cooperative - Stage of Input Supply (production being
intensified as of now for a sustained production and processing)

Commodity/Industry Constraints Analysis Along the Chain


ISSUES AND CONCERNS:
Production:
BAS data showed that Bicol Region placed second to ARMM in terms of cassava
production and land utilization. For the past ten years Region 5 manifested a
decreasing trend in terms of area and production. The low productivity can be
attributed to several factors such as; (a) limited access and low adoptability of
cassava farmers to new technologies because of lack of capital and high cost of
production inputs; (b) lack of farm machineries for land preparation (i.e. tractor
units); (c) high transportation cost due to inadequate and poor condition of farm to
market road; (d) inadequate supply of high yielding varieties or planting materials for
immediate expansion and; (c) production of cassava is labor intensive during
harvesting.
Post-Harvest:
Fresh cassava is highly perishable.

The tubers once harvested easily deteriorate

especially during rainy season. Discoloration takes place within three (3) days. The
lack of post harvest facilities and equipment like chipper, granulator, mechanical
dryer and drying pavement contributed to high cost of production that usually
discouraged farmers to continue producing cassava on a commercial scale. At
present, majority of cassava farmers produced tubers only for human consumption
wherein harvesting is manageable and dependent on the needs of the farmer.
During harvesting one major consideration is the packaging material to be used to
minimize losses and reduce deterioration of the tubers.
tubers in sack.
Processing:

Farmers usually packed

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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To date, only few cassava farmers are aware of these various uses and less ventured
into primary processing like granulation and chipping.

The primary processing is

usually done through a cooperative because processing equipment like rootcrop


granulator, chipper, drying facilities and warehouses are too costly for farmers to
acquire. They also lack knowledge and skills on cassava processing technologies.
Cooperative like the Maymatan Farmers Multipurpose Cooperative, who is already
established producer of granulated cassava still experiences lack of continuous
supply of fresh cassava tubers. The cooperative sourced out fresh tubers as far as
Camarines Norte in order to satisfy their contracted Purchase Order from SMC.
Marketing Support:
Cassava farmers market their produce as fresh tubers either in public market or in
cooperatives that are into cassava processing. Farmers have a hard time marketing
their produce because SMC requires regular supplier of granulated cassava wherein
small farmers cannot cope up with the demand of the intermediaries.

Lack of continuous supply of cassava tubers

Unorganized industry stakeholders

Competitive Analysis
The buying price of fresh tubers of Maymatan Farmers Multipurpose Cooperative
depends on the size of the tubers, e.g., Large P2.50/kg; Medium P2.25/kg; Small
P2.00/kg. The coop sell granulated cassava at a price of P9.00 to SMC. Price is being
dictated by SMC. Farmers can have higher income if they will plant high yielding
varieties of cassava at the same providing inputs to ensure high yield (large tubers)
and eventually attain better market prices.
Areas for improvement
1. Production - the supply of cassava tubers is still not enough to make the
existing coops in full operation.

Encouragement of farmers to start/continue

planting of HYVs of cassava can be through:


a. Government to provide incentives/benefits for those who will plant cassava;
b. Provide options like corn-cassava planting in expansion/new areas in order to
have income while waiting for the cassava for harvesting;
c. Develop areas especially in island provinces that will become source of
planting materials as production support of the commodity;

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Under the RP-SPAIN, SAIS-BC Project

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d. Machine/equipment assistance can be given to encourage improvement


and expanded production (e.g., provision of tractors); and
e. Provide other farming technologies to increase production, e.g., cassava
under coconut aside from the promotion of HYVs such as Sultan 7, Lakan 1
Yellow, KU-50 and Golden Yellow.
2. Value Adding - Cassava has many uses. San Miguel Corporation for instance
utilizes cassava for flour, liquor, sweeter, adhesive, and lately as feed ingredient.
The company preferred granulated cassava because chip form of cassava
requires another processing before it can be utilized as feeds.
3. Strengthening and capability building of coops/assoc beneficiary this will
lead to encouragement of farmers to plant cassava especially in idle lands and
eventually sold it as either as fresh tubers or chips to the coops for their own
mutual benefits;
4. Use of high quality machines especially on the part of coop-processors,
machines like granulators be further improved to maximize the input-output ratio
during the processing and augment the costs incurred of high fuel/electric and
maintenance costs;
6. Expansion of storage facilities for a more efficient and safe working area and in
order to meet volume required by SMC before transporting the product; and
7. Strengthening the marketing agreements between the coops/assocs and the
buyer for a more efficient and cost-effective marketing transactions.

For

marketing, consolidators play a very important role since SMC does not transact to
those with small volumes, our coops who will be at the same time the consolidators
should be capacitated to be able to consolidate larger volumes, therefore, one of
the assistances could be trading fund for them; and
8. Study better market flows especially in island provinces where they can minimize
logistics/transportation costs (e.g., market in SMC Cebu instead of Manila).
Impact of SAIS-BC-Provided Interventions
1. The existence of coops that needs the supply of cassava tubers gives avenue
for the farmers to plant cassava, a crop considered with low requirements of
inputs, therefore less cost of production;
2. The provision of interventions in value-adding of the commodity capacitated
the farmer-coops to start a feasible source of income for them through the
cooperative. These machines lowered the investment cost of the cooperative
with the provision of the granulators and other machine/equipment and including
trucks for the logistics; and

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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3. Strengthening and organizing the coops/assoc started already which means


that there will be channels established that will serve as medium/media for further
programs/projects of the government especially DA to cassava farmers;
CONCLUSIONS AND RECOMMENDATIONS (for Cassava)
The interventions provided by the RP-SPAIN SAIS-BC Project empowered the farmers
through the coop/assoc beneficiaries by giving options of having additional income
by planting cassava either intercropped in their existing crops or planting in idle lands
with high yielding varieties and introduction of new technologies for good yield and
avail better prices.

There are further strategies that should be done since coop

beneficiaries are still not on its full operation as of now. The promotion of planting
cassava should be intensified and provide more options for farmers that will still have
income while waiting for the 8 to 9 months waiting time before harvest. There are still
coops that are not operational or operating under rated capacity that should be
given continuing monitoring and assistance from the agency to become fully
operational.
POTENTIAL INTERVENTIONS
Capacity Development on Improved Production Process this should be prioritized
as an intervention for all the coops/assoc so that they can learn the strategies to be
cost effective and maximize its resources. This can be done through various series of
knowledge/skills training aside from further improvement of facilities and equipment
and to attain high-quality products and eventually to avail better prices.
Production and Value Addition quality control right from production focusing on
the variety used, proper cultural management practices, processing techniques (for
the coop), packing and storage strategies (to minimize costs) aside from attaining
the desired volume (to obtain better market price).
Strengthening and Developing Effective Marketing Strategies
Infrastructure Development storage facilities improvement and expansion for
effective use and security of the processing area are the needs seen now in the
coops/assocs.

Moreover, proper protocol in the processing premises should be

observed to avoid accidents/disasters that may lead to further losses.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
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Logistics Support one of the problems encountered of the Maymatan Farmers


Multipurpise Cooperative along the chain is the key cost-driver which is are the sacks.
Options should be made for packing, storage and transport that will evade the coop
from using bulk of sacks amounting to P2,100 per month.
Capacity Building there is still a need to strengthen the coop/assoc. beneficiaries of
the project to ensure the life and sustainability not only of the project but of the
cooperative where our farmer-beneficiaries are the members. Their capacity to
TIME-LINE FOR INTERVENTION
Interventions that can be done should be right after the end of the project, starting
first in production support to increase raw material supply (fresh tubers) alongside
with strengthening of the coops/assoc should be prioritized to create production and
marketing strategies including logistics strategies minimizing costs and maximizing
resources. And if the coops/assoc are in full operation, improvement of facilities,
machines and equipment can be done.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

91

ABACA
COMMODITY PROFILE
Abaca (Musa textiles), known internationally as Manila Hemp, is indigenous in the
Philippines. It is similar to banana, canton and pacol. However, It can be
distinguished by the formation and coloration as well as by the size and shape of its

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
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leaves, heart, trunk and fruit. The roots of the plants are added externally - not
becoming an essential part. It arises from the corm lying between 15 to 25 cm below
the surface of the soil. The leaves are tapering, narrow and glossy-green with pointed
end petioles. The trunk, heart and fruit of the plant are smaller than those of banana
and pacol. It height reaches an average of 2.44 meters.
Abaca fiber is one of the sturdiest natural fiber. In fact, its quality is one major factor
that gives the commodity highly competitive among other natural hard fibers in any
given market. The fibers of abaca are utilized as raw materials in the pulp and paper,
cordage and twine, yarns and threads, and fibercraft business.
This plant is mostly found in upland areas and interior parts of the country.
Recommended varieties include Tinawagan Puti, Tinawagan Pula, Sogmod and
Lausigon for Region V; Laylay, Inosa, Linawaan, Linlay, Putian, Laguis, Linlib and Linino
for Region VIII; and Inosa, Tangongon and Maguindanao for the Mindanao Regions.
Uses
The abaca fiber is extracted from the stalk of the plant, specifically from the outer
covering of the leaf sheath. It is considered the strongest of natural fibers being
three times stronger than cotton and two times stronger than sisal fibers. Abaca is
far more resistant to salt water decomposition than most of the vegetable fibers,
making it suitable for rope and cordage manufacture.
Considering its prime qualities, abaca is also an excellent choice over other natural
fibers for producing thin papers of high porosity and high strength. Abaca can also
substitute for wood pulp in the manufacture of a general line of paper products, a
usage that could contribute immensely to the conservation of the worlds
diminishing forest resources.
Like most commodities, official standards of quality have been set and are being
strictly enforced for abaca. The official standard grades of abaca fiber are divided
into three (3) classes depending on the manner of extraction, namely: handstripping, spindle-stripping and decortication.
Quality is determined by strength, cleaning, color, texture and length of the fiber. In
terms of cleaning (which is a direct result of the stripping apparatus or knife used),
the standard grades for hand- and spindle-stripped are:
EXCELLENT

S2, S3

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
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GOOD
FAIR
RESIDUAL

93

I, G, H
JK, M1
Y, OT

Spindle-stripped abaca fibers are indicated by the letter S before the official
grade, i.e., S-S2, S-I, and so on.
For decorticated abaca, the official grades are AD-1, AD-2 and AD-3.
Abaca is processed into cordage, pulp and specialty paper and fibercrafts
including handwoven fabric. Below is a summary table on the uses of abaca and
their corresponding grade requirements:
Uses of Abaca

Grades/Types

Cordage products - ropes, twines,


marine cordage, binders, cord

S2, S3, I, G, JK, M1, Y

Pulp and paper manufactures tea bags, filter paper, mimeograph


stencil, base tissue, sausage skin,
base paper

S2, I, G

Cigarette paper, currency paper,


chart, file folders, envelops, time
cards, book binders and parchment
paper

G, JK, M1, Y, OT

Microglass air filters media,


x-ray negative, optical lens wiper,
vacuum filter, oil filter

S2, I, G, JK

Nonwovens - medical gas masks


and gowns, diapers, hospital linens,
bed sheets

S2, I, G, JK

Handmade paper - paper sheets,


stationeries, all-purpose cards, lamp
shades, balls, dividers, placemats,
bags, photo frames and albums,
flowers, table clock

All grades including wastes

Fibercrafts - handbags, hammocks,


placemats, rugs, carpets, purses and
wallets, fishnets, door mats

S2, G

Handwoven fabrics sinamay,


pinukpok, tinalak, dagmay

High grades

Sacks, hotpads, hemp coasters,

S3, H

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Baskets, furniture

lupis and bacbac*

Wall paper, wall cover

S2, G, JK, Y

Others - wire insulator and cable


Automobile components/composites

JK, M1, Y, OT

Potential Uses of Abaca

94

Grades/Types

Fiberboards - roofing tiles, floor tiles,


hollow blocks, boards, reinforcing fiber
concrete and asphalt

OT and other waste

Fuels musafel

Abaca plant

Miscellaneous application - wigs,


grass skirts

All grades

Production
Bicol Region is the second largest producer of abaca in the Philippines behind
Eastern Visayas which produces 34.77% of the total national abaca production. Bicol
Region accounts for 26.85% and Davao Region 14.98%. Together, these three regions
account for 76.61 % of the total national abaca production for 2008.

Figure 1. Distribution of abaca production, Philippines, 2008


Abaca production contracted at an average rate of 0.42 percent annually. Positive
growth rates were attained during years 2000, 2003, 2004 and 2008. The erratic
growth of the abaca production in the region can be attributed to the frequent
occurrence of typhoon in the region which greatly reduces abaca production. In
addition, production is greatly affected by demand for abaca fiber and allied
products in the world market.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

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Figure2. Abaca production (in MT), Bicol Region, 1999-2008


Catanduanes continued to be the top producer of abaca with 14,506.4 metric tons
of abaca production in 2008 accounting for 79% of the total regional production. The
provinces of Sorsogon (10.2%), Albay (7.65%), Camarines Sur (2.13%) and Camarines
Norte (1.02%) shared the remaining 21 percent.

Figure 3. Distribution of abaca production (MT) by province, Bicol Region 2008

Area Harvested
From 1999 to 2008, the area harvested for abaca in the Philippines grew by an
average of 2.49 percent. In 2008, in terms of area harvested, Eastern Visayas Region
remains on top with 44,943.2 hectares accounting for 32.68 of the total area
harvested in the Philippines. This is followed closely by Bicol Region with 42,662
hectares or 31.02 percent of the national total. Davao Region and ARMM harvested
9,912 and 7,914.3 hectares respectively.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

96

Bicol regions abaca area remained virtually the same from 1999-2008 averaging an
annual increase of 0.05 percent. Abaca production is greatly affected by the
demand from the world market. Considerable drop was observed during the period
2000 to 2001 which coincided with the terrorist attack at the World Trade Center
resulting to a reduction in the demand for abaca products at the world market.
The drop in the area harvested in 2004 could be attributed to the effects of typhoons
and other natural calamities that hit the region during the said period.

Figure 3. Area harvested for abaca, Bicol Region, 1999-2008.


In 2008, the top province was Catanduanes with 22,384 hectares accounting for
52.47% of the regional total. Sorsogon was second with 7,276 hectares (17.05%),
followed by Camarines Sur with 6,679 hectares (15.66%), Albay with 5,300 hectares
(12.42%) and Camarines Norte with 1,023 hectares accounting for only 2.4% of the
current regional total.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

97

Figure 4. Distribution of area harvested for abaca, Bicol Region, 2008.


Productivity
In terms of productivity, the average annual yield of abaca in the region is 0.43
metric tons per hectare. It also showed that productivity of the farms in the Bicol
region remains erratic due to the prevalence of typhoons in the area. The peak
productivity was attained in the years 2000 and 2004 with a regional annual average
of 0.52 metric tons per hectare.
The province of Catanduanes attained the highest average annual production of
0.78 metric tons per hectare in 2004 which is much higher than the regional average
of 0.52 metric tons per hectare during that year.

Figure 5. Productivity of abaca farms, Bicol Region, 1999-2008

In 2008, Catanduanes ranked first in terms of productivity with an annual average of


0.65 metric tons per hectare, Albay was second with 0.27 metric tons per hectare
followed by Sorsogon (0.26 metric tons), Camarines Norte and (0.18 metric tons) and
Camarines Sur (0.06 metric tons).
THE PRODUCTION PROCESS
Land Preparation
The land is cleared during the dry months of the year to prepare for the eventual
planting at the onset of the rainy season. Grasses and vines are cut first then plowed.
The first plowing should be shallow to bring the weeds just at the proper depth for
germination then followed by deep plowing 10 to 14 days to kill the germinated
weeds before harrowing.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

98

Propagation
Materials for propagation should be chosen carefully. The source of seedpieces must
be from healthy or pest and disease free high yielding varieties. The sucker or whole
plant and the corm or rootstocks are the two types of planting material.
Time of Planting
Planting is best done during the onset of the rainy season since dry periods can stunt
the normal growth and development of young plants.
Methods of Planting
The square method is commonly used in the Bicol region. In the square method, hills
are set apart in equal distances. If the farm is fully planted, plants should be spaced
at 2.5 x 2.5 meters apart with 1,600 hills accommodated in a hectare.
In the double row or avenue method, abaca are planted in two rows at about 1.5 x
1.5 meters apart with a distance of 2.5 meters from each set. Cash crops like peanut,
soybeans and others can be intercropped in this method.
In the Quincunx or triangle method, 1852 hills are planted in a hectare with hills set at
a distance of 2 x 2 meters.

Shade Establishment
Abaca plantations should be provided with shade trees to prevent excessive heat
from damaging the plants and serve as windbreaks since typhoons in the Bicol
Region are frequent. Permanent shade trees such as anii, dapdap, ipil-ipil and
temporary shade trees like katuray and madre de cacao are recommended. Shade
trees provide and maintain a favorable temperature for abaca. They also conserve
soil moisture and prevent weed growth to a certain degree.
Fertilization
Abaca, like other perennial crops, occupies the same land for several cropping
years. The same crop is harvested year after year resulting to the gradual removal of

99

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

the essential nutrients from the soil. When the supply of these nutrient elements are
not replenished, the soil gradually looses its fertility.
Abaca requires large amounts of nitrogen (N) and potassium (K) but less of
phosphorus (P). About 40 % of the ash from abaca fiber is potassium.
Nitrogen greatly improves its growth and suckering ability while Potassium increases
the tensile strength of its fiber.

Table 1. Fertilizer recommendation for newly established plantations.


Period of Fertilizer
Application

Type of Fertilizer

Grams per
plant (grams)

No. of bags
per hectare

3 months after planting

Ammonium Sulfate (20-0-0)

62.5

8 months after planting

Ammonium Sulfate (20-0-0)

125

187.5
375

6
12

21 months after planting Complete Fertilizer (14-14-14)


TOTAL
Source: Bicol Technoguide for Abaca, 1983

For established plantations, annual application of 187.5 grams per hill or 12 bags per
hectare of complete fertilizer (14-14-14) every year is recommended. Fertilizer is
applied in split of equal doses annually. Fertilizer is applied in a ring one foot away
from the base of the pseudostems, the area where the roots are shallow.
Cleaning and Mulching
The removal of dried leaves is necessary because they are fire hazards in the
plantation, they serve as favorable media for fungal, bacterial and insect growth
and they impede the growth of suckers by limiting sunlight penetration thus, making
regular inspections and indexing difficult.
Dried or yellowing leaves must be severed from the stalks with the use of a doublebladed scythe attached to a long pole. Old and yellowing leaves are cut at the
petiole further from the stalk so that the leaf sheaths are kept fresh. The cut leaves
are laid on the space between hills and used as mulching materials to preserve soil
moisture and inhibit the growth of weeds.
Weed Control
Weeds are not much of a problem in a well-established and maintained abaca
plantation. The tall plants shade the grounds such that weed growth is effectively
checked or minimized. However, if weeds are abundant, they can be easily
controlled manually or mechanically by handweeding, plowing or underbrushing at
2 to 3 months interval or as necessary.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

100

Harvesting
Stalks are harvested three to five months before the flagleaf appears. Abaca growth
has been observed to slow down a few months before flagleaf appearance. The
practice in the region is to harvest abaca twice a year. A longer interval may result in
overmatured stalks which consequently yields fibers of low quantity and poor quality.
Three steps are involved in the harvesting of abaca, the cleaning, topping and
tumbling.
Cleaning
In cleaning, the area surrounding the base of the stalk is cleared of dried leaves,
grasses and other weeds. Thinning of floaters and spindly suckers and cutting
afflicted plants and dead stalks are also done during cleaning
Topping
Topping is done by cutting the leaves of the stalk to be harvested. Topping is done
with the use of a curved knife fastened at the tip of a long pole and then cutting the
leaves. Topping is done to avoid inconvenience to the harvester and minimize
damage to the young and immature plants when the stalk is toppled down.
Tumbling
Tumbling, on the otherhand, is done using a sharp tumbling bolo. A smooth and
slanting cut is made on the stalk about 5 cm from the last leaf scar to prevent the
accumulation of sap. The topped stalks are then tumbled by cutting them close to
the ground with the direction of the cut portion inclined towards the base.
Post harvest Operations
Tuxying
Tuxying is the process of separating the primary fiber layer from the secondary fiver
layer of leafsheath. The tuxying knife is inserted between the layers and the entire
length of the leafsheath is pulled off to completely separate the layers.
Distinct grade of fibers are produced from the different groups of tuxies. It is
necessary to group the tuxies according to the sequence of the leafsheaths to
facilitate the classification of fiber.
Stripping
This is the process of fiber extraction and is one of the most laborious phase in the
production of fiber.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

101

The traditional methods of stripping are by hand (hagotan) and spindle stripping. A
spindle stripped fiber tends to be whiter and more lustrous than a corresponding
grade of hand stripped fiber. In terms of physical properties, the spindle stripped fiber
is superior to a hand stripped fiber. Another method is by defibering scheme. This
method is designed specifically for pulp and paper production.
All stripped fibers are dried before storage. Storage is done in the open and air drying
in temporary shades. Contact of fresh fibers with soil and dirty matters should be
avoided because these affect their classification and grade. These fibers must be
thoroughly dried to prevent attack of molds or weevils which cause rapid
deterioration and subsequently the reduction in the quality of the fibers.
Storing
Dried fiber should be stored at least in room temperature and free from foreign
matters or plastic materials.
Grading
There are basically two categories of abaca fibers depending on the manner of
extraction, namely hand stripped and spindle-stripped. The former method of fiber
extraction is being widely practiced in Bicol Region.
The fiber are either graded or classified as NORMAL (S2, S3, I, G, H, JK, M1) and
RESIDUAL (Y, OT) or EXCELLENT (AD, EF, S2, S3) GOOD (I, G, H), Fair (JK, M1) and
COARSE (L).

MARKET GROWTH AND TREND


Supply, Demand, Gap
Supply
National
From 1999 through 2008, production of abaca fiber which averaged 68,962 MT per
year, had been increasing steadily in the first two (2) years. In 2001, however, fiber
yield slumped by 16.3% because of the dampened foreign demand due to global
recession and the September terrorist bombing in the United States, one of the
countrys major trading partners for abaca cordage and pulp. Production has since
recovered until 2005 caused by the increase in the output of all producing regions,
except in Bicol and Southern Mindanao, due to expansion in hectarage and

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

102

improvement in yield per hectare. However, the series of strong typhoons in the
second half of 2006, disease infestation and the intensified production of bacbac
seriously affected fiber output and further aggravated in 2007 when production level
was at its lowest at 60,723 MT.

Figure 6. Production of abaca fiber, Philippines, 2000-2008.


Despite the setbacks, abaca production had recovered in 2008, reaching the
highest level of 77,389 MT during the decade. This was primarily the effect of the
incremental production from the abaca plantations established in 2005 and 2006
under FIDAs program Goal I Development of New Agri-Business Lands and the
continued strong demand and attractive prices offered for the fiber by the local
traders, processors/manufacturers and exporters.
Of the ten-year average annual production of 68,962 MT, 55,897 MT or 81.1% were
baled while the rest was traded in loose form. The major grades such as G, JK, S2 and
I comprised 73.7% or 41,220 MT of the average baling. Baling of G averaged 12,826
MT per annum sharing 22.9% to total output followed closely by JK with an average
baling of 10,972 MT contributing 19.6% to total. Baling of S2 and I averaged 10,012
MT and 7,410 MT annually, respectively, with corresponding shares of 17.9% and
13.3%.
All top four grades exhibited increasing rates during the years under review as the
local processing sector and the international market have shown a great need for
these grades. Baling of G increased by 6.3%, JK by 6.0%, I by 2.4% and S2 by 0.3% per
annum.
Table 2. Annual baling of abaca fiber (in MT) by grade, Philippines, 2000-2009

103

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

GRAD
E

%
Shar
e

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Ave.

55,78
7

46,54
1

47,92
7

56,54
3

60,47
6

61,82
1

58,16
0

50,93
7

67,63
6

48,03
3

55,38
6

108

113

11,79
1

10,31
9

8,866

75
10,90
8

9,374

128
10,46
8

S2

142
11,05
6

7,924

9,826

9,588

57
10,01
2

S3

3,509

2,955

3,264

3,736

3,692

3,593

2,950

2,322

2,601

2,629

3,125

5.6

5,485
10,18
7

6,272
12,66
0

7,225
15,50
5

8,200
13,85
5

8,442
13,92
3

7,177
13,70
9

6,935
11,43
0

9,166
15,84
1

9,900
12,68
4

7,661
13,18
1

13.8

7,811
12,01
2

2,013

1,964

2,316

2,403

7,620

6,873

8,930

2,034
13,32
4

1,701
11,34
2

2,585
17,38
3

6,932

2,108
10,63
7

3.8

7,832

2,113
13,06
8

1,672

JK

2,282
13,06
4

19.2

M1

1,277

1,357

1,169

1,645

1,541

1,796

1,744

1,722

2,449

655

1,535

2.8

7,589

5,379

4,088

4,652

5,107

4,859

4,981

3,938

5,372

1,689

4,765

8.6

OT

2,546

2,089

2,306

1,850

1,714

2,103

1,697

3,404

1,975

1,372

2,106

3.8

WS

0.1

24

0.5

0.0

223

207

414

828

184

0.3

TOTAL

EF

AD-1

AD-2

AD-3

1
36

127
nil

10

2
19

82

100.0

0.1
18.1

23.8

12

0.0

Source: Fiber Industry Development Authority-Region 5 (FIDA 5)

Foreign
Since 1991, Ecuador had been supplying abaca fiber particularly to local pulp
manufacturers except in 2005 when there was no importation made.

The pulp

processors resorted to fiber importation to fill up the deficiency in local supply of


specific grades and meet pulp buyers specifications. During the ten-year period
ending 2008, importation of Ecuadorian abaca averaged 319 MT per year.
The Philippines, specifically the abaca pulp sector, imported an average of 319 MT of
abaca fiber from Ecuador during the last ten years. In 2005, however, the Philippines
did not import abaca fiber as the sector was able to absorb the biggest bulk (44,470
MT or 60.2%) of the countrys total fiber output of 73,875 MT during the said period.
Table 3. Abaca fiber imports, Philippines 2000-2008.
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
Source: FIDA 5

Quantity
259
484
68
56
196
965
252
639

Value (FOB US$)


142,675
363,426
52,924
43,927
111,380
743,425
282,710
961,531

104

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

DEMAND
Domestic Consumption
Domestic processors consumed an average of 51,575 MT or 74.8% of the countrys
average yearly production of abaca fiber during the past ten years. This sectors fiber
consumption level was observed to be increasing although at a minimal rate of 0.9%
per year. Abaca fiber is being processed locally into pulp, cordage and various
fibercraft items.
The pulp sector consistently remained as the growth area of the abaca industry
utilizing an average of 35,481 MT or 68.8% of the annual average local consumption
and increasing moderately at 2.9% per annum. The pulp millers utilization level is
highly dependent on the demand for pulp by the specialty paper manufacturers
abroad as abaca pulp is the principal raw material used in the manufacture of meat
and sausage casings, tea bags, cigarette paper, currency paper and other specialty
papers. Processing of abaca pulp into specialty papers is done in Europe, the United
States and Japan instead of in the Philippines as there is no available processing
facility in the country.

Table 4. Annual domestic consumption of abaca (in MT), Philippines, 2000-2008.


Year

TOTAL

PULP

CORDAGE
YARNS & TWINES

FIBERCRAFTS

2000

50,077

30,960

12,227

6,890

2001

52,012

32,818

11,615

7,579

2002

48,230

33,610

10,600

4,020

2003

52,560

36,095

12,105

4,360

2004

50,900

37,600

9,250

4,050

2005

59,170

44,470

9,840

4,860

2006

56,175

40,200

10,625

5,350

2007

47,362

30,312

12,950

4,100

2008

51,722

38,702

10,120

2,900

Source: FIDA 5

The cordage sector, on the other hand, consumed an average of 11,084 MT of


abaca fiber per annum or about 21.5% of the yearly average fiber usage of the
domestic manufacturers but decreasing at a rate of 1.4% per year. Cordage and
allied products have continuously been facing stiff competition from those made of
synthetics and other cheaper natural materials.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

105

Figure 7. Domestic utilization of abaca, Philippines, 2008


Fiber utilization of the fibercraft processors who are mostly cottage-based, exhibited
a decreasing annual rate of 7.7% and consuming an average of 5,010 MT or 9.7% of
the annual average domestic consumption. These figures, however, may not have
reflected the actual situation in the fibercraft industry, as purchases of other fibercraft
makers were in loose form and therefore difficult to monitor. Unlike the other sectors,
the fibercraft processors are numerous, not as well-organized and are scattered
throughout the country.
Exports
The Philippines is the biggest market player in the global market for abaca products
together with Ecuador. Together, these two countries dominate the world market for
abaca. On the average, Philippines supplies more than 85% of the total world
demand for abaca products. The remaining 15% is supplied by Ecuador.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

106

Figure 8. Annual World Supply and Demand of Abaca (in MT), 2000-2008
For the past ten years, the Philippines generated an average of US$80.8 million per
year from the exports of abaca fiber and manufactures, 82.6% or an average of
US$66.6 million of which came from abaca manufactures such as pulp, cordage,
yarns and fabrics and fibercrafts.

The rest (17.4%) was contributed by raw fiber

exports with average earnings of US$14.0 million yearly. From among the abaca
manufactures, pulp led the growth in export with shipments worth an annual
average of US$40.6 million or a 50.3% share to the annual average income.
Meanwhile, export earnings from fibercrafts and cordage/allied products averaged
US$13.9 million (17.1%) and US$11.7 million (14.5%) per annum, respectively, while
those from

yarns and fabrics accounted for US$0.4 million (0.5%) of the annual

average.

Figure 9. Distribution of abaca annual export earnings, Philippines, 2000-2008

Abaca Fiber
Exports of abaca fiber averaged 15,474 MT, decreasing at a rate 3.5% per annum
during the years under study. The demand of the countrys major trading partners
contracted substantially, particularly in 2001, which was not offset by the surge in the
demand for the fiber in the succeeding years. Some specialty papermakers likewise
shifted to the importation of abaca pulp instead of the usual raw fiber due to the
strict anti-pollution laws in their respective countries.

107

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Figure 10. Annual exports of abaca fiber, Philippines, 2000-2009.


Europe, specifically the United Kingdom, is the premier destination of abaca fiber,
absorbing an average of 7,501 MT or 48.5% of the ten-year average exports. In 2003
and 2004, UK imported more abaca fibers as a US-based abaca pulp mill
concentrated its pulp operation in the country that eventually led to an increase in
its fiber demand. However, in 2005, there was a shift in the preference from abaca
fiber to pulp that shipment drastically went down and leveled off at 6,650 MT and
continued to be at approximately the same level in the succeeding years.
The Asian market was the second most important with Japan as the major leading
destination. Japan continued to influence abaca trade in the region accounting for
the biggest market share averaging 5,481 MT or 87.8% of the 6,276 MT annual
average Asian imports. Thus, when the Japanese market weakened in 2001 and
2002, the trend in the overall Asian demand exhibited the same pattern. Since 2003
onwards, imports of Japan rebounded due to the printing of the Japanese yen that
has

new

designs

and

sophisticated

security

features

as

protection

from

counterfeiting. Furthermore, businesses in Japan have picked up supported by its


strong exports to the United States and Asian countries, especially China.

India,

South Korea and Indonesia have consistently been buying abaca fiber although the
quantities were very minimal with combined aggregate share of 2.0% to the annual
average foreign trade. Abaca fiber is used as raw material in the manufacture of
cordage and fibercrafts in these countries. China showed great promise that its
imports accelerated, averaging 913 MT in the last five years and is presently the
second biggest Asian market for Philippine abaca fiber. It is now using the fiber in the
manufacture of tea bag, capacitor paper and fibercrafts.

108

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Figure 11. Destination of abaca fiber exports, Philippines, 2000-2009.


The importation of North America averaged 1,420 MT from 1999 to 2008 with the
United States as the major market destination. Imports of the United States drastically
declined in 2003 to only 29 MT from 1,168 MT in 2002 and then stopped in 2004 but
resumed in 2005 with only 20 MT because its biggest abaca pulp mill ceased its pulp
operation in the country to concentrate in the United Kingdom. The same low trend
was recorded in the next three (3) years (2006 2008), with corresponding fiber
imports of 26 MT, 50 MT and 22 MT.
Among the four major grades of abaca, JK and G were the top exports averaging
4,745 MT and 4,574 MT per year respectively, or corresponding annual shares of 30.8%
and 29.7%. Shipment of I averaged 2,230 MT or 14.5% while S2 posted an average
annual shipment of 1,984 MT or 12.9% of the average during the last ten years.
Foreign demand for these major grades slowed down with I recording the highest
rate of decrease of 15.5% per year.
Table 5. Annual exports of abaca fiber by grade, Philippines 2000-2009.
GRADE
TOTAL
EF
S2
S3
I
G
H
JK
M1

2000
19,38
3
1
0
2,89
2
4
6
3,83
3
5,69
3
21
3
4,56
0
3
1

2001

2002

2003

2004

2005

2006

2007

2008

2009

12,392

14,008

16,251

19,310

13,684

12,887

13,731

13,385

7,228

18

26

18

30

28

1,754

1,849

1,776

2,154

1,471

1,518

1,803

1,359

1,381

111

117

188

192

292

297

457

345

190

1,932

2,249

2,596

2,952

1,757

1,393

1,049

817

373

3,565

4,777

5,535

6,156

3,735

4,168

3,823

2,887

2,303

304

289

259

163

175

101

126

156

14

3,358

3,096

4,161

5,902

5,038

4,366

5,403

6,745

2,395

367

193

389

207

124

122

141

99

97

109

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Y*

1,102

977

781

766

774

917

244

Y1

1,381

Y2

6
2,07
9

991

173

296

189

47

OT*

28

104

32

125

60

226

2
0

39

19

285

47

* new standard grades of abaca; grades Y1 and Y2 replaced by Yand O and T


replaced by OT

Source: FIDA 5

Abaca Pulp
Practically all the abaca pulp manufactured in the Philippines are shipped outside
the country, especially when its use as raw material for cigarette paper by a local
cigarette manufacturing company ceased in the latter part of 2002. An average of
18,176 MT of abaca pulp was exported every year over the ten-year period
beginning 1998 with shipments expanding at an annual rate of 3.7%. Some specialty
paper manufacturers prefer using abaca pulp instead of raw fiber because pulping
is highly polluting that it harms the environment. The stringent anti-pollution control
laws in their countries require them to put up anti-pollution control mechanisms which
they consider costly.
Europe was the most important destination for Philippine abaca pulp as five specialty
paper manufacturers using abaca pulp are situated in this continent. Exports to
Europe averaged 12,327 MT per year or 67.8% of the average annual with 7,002 MT or
38.5% being absorbed by Germany. While Germany had the biggest market share,
the United Kingdom was the fastest growing market with an impressive annual
growth rate of 49.9%. This was due to the transfer of the pulp operation of a USbased abaca pulp mill to the United Kingdom. France has likewise been an
important export market for abaca pulp with imports averaging 1,768 MT per year or
a 9.7% share to the total annual average exports to Europe.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

110

Figure 12. Destination of abaca pulp exports, Philippines, 2000-2009.


Foreign shipments to Asian countries averaged 5,040 MT per annum with Japan as
the leading destination. Japans purchases averaged 4,348 MT annually or 23.9% of
the average annual during the period under review. Aside from the Japanese yen,
abaca is processed into capacitor paper, insulation paper, tea bag, masking tape,
stencil paper, filter oil absorbent paper casings and other speciaIty paper products.
China, Taiwan and South Korea had consistently purchased abaca pulp from the
Philippines during the last ten years. Their shares though, were minimal at 1.7% for
China, 1.0% for Taiwan and 0.3% for South Korea.
The imports of the United States, the third biggest market for Philippine abaca pulp,
averaged 623 MT contributing 3.4% to the annual average during the ten-year
period. Abaca is now utilized in the manufacture of cigarette filter of the Winston
and Marlboro Lights cigarettes.
Abaca Cordage and Allied Products
From 1999 to 2008, foreign trade of abaca cordage and allied products such as
ropes, cables and twines averaged 7,809 MT per year and increasing at a minimal
rate of 0.1% annually. The stiff competition posed by cordage made of synthetics
and other cheaper natural materials continued to cause setback to the countrys
abaca cordage industry.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

111

Figure 13. Destination of abaca cordage and allied products exports, Philippines,
2000-2009.
The United States absorbed the bulk of the exports contributing 65.9% or 5,144 MT to
the annual average.

Singapore, Canada, Germany, Malaysia and Australia

continued to be the other major markets for Philippine cordage.


Abaca Fabrics
Foreign shipments of abaca fabrics had been on the uptrend recording an annual
average of 240,765 sq. m. and a growth rate of 27.2% during the years under study.
The highest volume of exports was made in 2008 at 698,335 sq. m with surge in the
demand of Hong Kong, Italy, Japan and United Kingdom and the resumption of
importation of Spain and France.
China, which began its regular fabric importation only in 2002 but on irregular basis,
unexpectedly emerged as the third biggest market in 2007 and 2008 posting an
annual average of 11,739 sq.m. or 4.9% share during the period. During the past ten
years, Hong Kong emerged as the biggest market for Philippine abaca fabrics,
importing an average of 102,297 sq. m. per year or 42.5% of the annual average. It
was followed by Italy with average purchases of 93,357 sq. m. or 38.8% of the total
annual average. Other regular buyers were the United Kingdom and Japan, with
corresponding imports averaging 9,119 sq. m. and 4,389 sq. m. per year. Nigerias
importation had been noticeably regular in the past four years, posting a yearly
average of 8,172 sq.m., while purchases of other trading partners were intermittent
during the last ten years.

112

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Figure 14. Annual abaca fabrics exports, Philippines, 2000-2008.


Generally, the demand for abaca fabrics and other fiber-based products is largely
dictated by fads and fashion although other consumers patronize natural-based
materials not only due to its unique appeal but also due to environmental
considerations.
Price
The price of abaca fiber is generally dictated by the prevailing world market price,
which in turn is dependent on the current supply and demand situation for the
commodity. In 2008, figure from the Bureau of Agricultural Statistics shows that the
monthly price for abaca fiber in the region ranged from P 38.36 to P52.49 per kilo. The
prevailing farmgate price for abaca fiber generally showed an increasing trend.

Table 6. Farmgate Price of Abaca Fiber (Peso/Kilo), Bicol Region, 1999-2008

1999
2000
2001
2002
2003
2004
2005
2006
2007
2008

Jan
18.78
28.23
16.88
20.17
22.31
22.41
36.40
36.02
29.40
38.36

Feb
18.17
19.63
16.62
18.74
22.08
22.88
36.61
36.98
27.15
39.08

Mar
17.89
22.59
17.24
15.64
21.55
24.42
34.54
36.01
26.69
44.08

Apr
19.72
24.18
16.42
18.25
22.83
26.32
34.59
36.16
26.36
43.33

May
19.68
21.17
16.42
18.87
22.52
26.33
34.40
35.77
26.22
46.40

Jun
24.91
19.71
16.91
19.37
22.61
28.13
34.83
35.34
26.71
49.13

Jul
23.11
15.46
17.64
19.06
22.81
28.44
34.88
34.05
27.35
49.55

Aug
20.87
19.58
16.84
19.81
22.60
28.53
36.58
34.21
27.92
56.48

Sep
20.76
18.86
17.69
20.49
21.18
29.10
34.62
34.09
37.15
51.84

Oct
22.35
16.61
17.66
20.40
24.43
27.93
33.85
34.69
38.23
51.17

Nov
22.62
16.49
17.05
21.32
22.29
30.86
34.73
34.82
38.40
51.22

Dec
21.16
16.24
18.32
22.06
23.07
32.22
35.84
34.40
38.53
52.49

113

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Source: Bureau of Agricultural Statistics (BAS)

In terms of average annual price of abaca fiber in the region, ten year data from
BAS showed a generally increasing trend except for a decline in prices during the
2000-2001 and 2006-2007 periods. The drop in farmgate prices in 2000-2001 could be
attributed to the terrorist attacks at the World Trade Center resulting to a reduction in
demand for abaca fibers. For the 2006-2007 period, the decline in the farmgate
prices could be attributed to the decline in the demand for abaca products in the
world market. On the average, the annual average farmgate prices of abaca grew
by 11.15% annually.

Figure 15. Average annual farmgate price of abaca fiber, Bicol Region, 1999-2008.

SUPPLY/VALUE CHAIN ANALYSIS


INDUSTRY PLAYERS
The abaca industry is made up of six major groups of industry players:

farmers,

strippers, classifiers, traders, fiber exporters and processors and manufacturers.


Farmers
As of 2008, there were 25,875 abaca farmers cultivating a total area of 46,861.12
hectares or an average of 1.8 hectares per farmer.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

114

Strippers
Strippers extract the fibers, either by hand or mechanical means. Included in the
stripping work are harvesting of stalks, tuxying and drying of fibers. The strippers are
paid on a pre-determined system wherein they receive 50 or 70 per cent of the
harvest depending on the prevailing practice agreed upon.
Classifiers
Classifiers sort and grade the fibers based on the standards set by the government.
Traders
Trading is done at different levels depending on the location of the farmers and
where the accumulation of fiber is done. Hence, there are traders in the barangay,
town, province, city and region. In each level, the pricing system includes mark-up
attributable to the service provided by the trader.
Traders are classified depending on the volume of fibers traded. A Class A trader
sells more than 75,000 kilos of fiber per year; Class B trader more than 50,000 kilos
per year; Class C trader more than 25,000 kilos per year and Class D trader 25,000
kilos and below.
As of 2008, there are 147 licensed traders and 5 licensed trader-exporters in the
region.
Fiber Exporters
The fiber exporters, also known as grading and baling establishments (GBEs), operate
in major abaca regions and usually maintain liaison offices in Metro Manila. It is in this
sector where abaca fibers, whether for local or foreign consumption, are graded
and baled, using high density presses, into 125 kgs of 100 cm. x 55 cm. x 60 cm.
bundles per specific fiber grade. There are 4 licensed grading-baling establishments
operating in the region.
Processors
Pulp Millers
As of 2008, there is one (1) abaca pulp company operating in the region. The
company have well-established market networks for their pulp which are principally
destined for the world market.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

115

Cordage Manufacturers
There is currently one (1) cordage firms operating in the region. They use abaca fiber
as the principal raw material for rope, cordage and twine manufacturing. Blending
with other natural fibers like maguey is done depending on the specifications of the
buyers.
Fibercraft Manufacturers
The fibercraft sector, which includes handmade papermaking, rugs and carpet
manufacturing and handloom weaving, is primarily a cottage-based industry.
Operating mostly in the countryside, the sector is a major source of livelihood
especially to the womenfolk and out-of-school youth.

Several of these

manufacturers have successfully established their markets abroad especially through


their unique, functional and creative designs.
The handloom weaving sector produces abaca fabrics which are used as raw
material for making novelty and household items, as dcor and wrapping material as
well as for high fashion wear and accessories. Some abaca weaves are blended
with metallic thread or polyester while others have printed, striped and ethnic
designs to suit the varying needs of the market.

There are currently 39 licensed

fibercraft manufacturers mostly cottage industries.


Other Processors
Other processors include manufacturers of machine-woven carpet, dartboard pads
as well as the makers of furniture who are now using abaca fiber and bacbac.

Commodity/Industry Constraints Analysis along the chain


Input Supply
The abaca farms in the region ranged from one to two hectares per farmer. The
trees planted were mostly of the Lausigon variety. This variety can produce up to
nine suckers per year. The others cultivated the Abuab, and Inosa varieties. Abaca
farms were not irrigated.
Production

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

116

There are about 25,875 abaca farmers in Bicol. They are considered to have poor
agronomic practices with the no or limited application of fertilizers and practices to
enhance productivity.

These can be due to the lack of resources to perform the

recommended practices for abaca. Planting of the recommended variety of FIDA 5


like Musa Tex 51 that would give them higher yield has not yet been adopted widely
in the area.
The harvesting cycle being practiced is twice a year at six months interval. Average
yield of abaca in Bicol is 700 tons per hectare per year. Harvesting is done by first
topping (cutting the leaves with topping knife), cutting the stalks with tumbling bolo,
and then piling. Tuxying or fiber extraction from the abaca leaf sheath (tuxy) is then
performed, followed by bundling. Labor for production would be for underbrushing,
ring weeding and harvesting. The usual practice of costing labor is through a 50-50
sharing scheme after harvest.
Processing
The Lausigon variety of abaca widely planted in Bicol has the characteristics of 1.5%
air dried fiber recovery from three fresh stalks. Percentage recovery of 1.0 to 1.5%, or
better is acceptable for economic utilization. Tensile strength is 55.70 kilogram per
gram meter (kg/g-m). Principal uses of abaca fiber are as pulp, cordage and twine
and fibercrafts.
At the farm level, only primary processing is undertaken. This involves extraction of
fiber from the harvested tuxies. The common method of extracting is hand stripping,
in which, a narrow strip of tuxy is placed under a serrated knife with pressure and
extraction is done by pulling the leaf sheath with hands. Drying is done through airdrying by tying the fibers in a string or rope. Other available technologies for fiber
extraction include spindle stripping and decortication.
Market
Local
The performance of the local end users of the abaca industry has a big impact on
the abaca industry in the region in as much as is the biggest domestic consumer of
abaca fiber in the region and most of its finished products end up in the foreign
market.

117

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

For the regions end users, the local pulp industry, cordage and fibercraft sectors
contracted. Operations of these sectors were on and off during the period due to
lack of orders. In 2009, the small volume of fibers purchased by the pulp
manufacturers pulled down the quantity of the local fiber trade. Domestic
consumption deflated by 18.26% compared to 2008 consumption.
The cordage sector suffered the same predicament, posting a reduction of 52.24% in
its consumption.
The handicraft industry in the region felt most of the impact of the financial crisis in
2009. The fibercraft processors/exporters are in a slump. The stiff competition from
ASEAN neighbours and the lack of orders has caused at least fifty percent of
handicraft exporters to close their operation.
Total purchases as recorded was lower by 13.86 percent from 2008.

Table 7. Local abaca consumption, Bicol Region, 2008-2009.


SECTOR

2008 (bales)

2009 (bales)

Difference

PULP

99,136

81,035

(18,101)

Rate of Inc/Dec
(%)
(18.26)

CORDAGE

20,806

9,936

(10,870)

(52.24)

FIBERCRAFT
TOTAL
Source: FIDA 5

1,493
121,435

1,286
92,257

(207)
(29,178)

(13.86)
(24.03)

Export
The United Kingdom remained as the top destination for Bicol abaca fibers, cornering
56.35% of the total regional fiber exports but its purchases deflated by 39.28% from a
year ago. In the same manner, shipments to Japan also fell by 59.6%. Spain slashed
down its orders to 3.33% and trading to China shrank to 30.65% share of the total
exports. Establishing its mark as a constant importer of abaca fiber in the region for
the past two years, Bangladesh post the only increase in the regions export sales
Table 8. Abaca export, Bicol Region 2008-2009
COUNTRY

UK
JAPAN

2008
(bales)

2009
(bales)

Percent
Share

Rate of
Inc/Dec

Percentage
Inc/Dec

19,980
1,812

12,130
732

56.35
3.40

(7,850)
(1,080)

(39.28)
(59.60)

118

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

CHINA
KUWAIT
BANGLADESH
THAILAND
INDIA
INDONESIA
SPAIN
TOTAL

7,920
72
150

29,934

6,600

30.65

(1,320)

(16.67)

900
180
180
90
720
21,532

4.18
0.84
0.84
0.42
3.33
100

750

500

(8,402)

(28.06)

Source: FIDA 5

Marketing Flow
Marketing is done at different levels depending on the location of the farmers and
where the accumulation of fiber is done. In Bicol area, more particularly in the
Province of Albay, fiber trading starts at the village level, the pricing system includes
mark-up attributable to the service provided by the traders.
From the farm, abaca fibers could either be sold to multi-purpose cooperatives or
barangay buyers stationed in the area. Barangay buyers are usually buying stations
of established town buyers which in turn sell abaca fibers either to exporters,
processors or fibercraft manufacturers.
Farmers
Farmers usually sell their fibers to barangay buyers, to multipurpose cooperative or
directly to town buyers regardless of the grades or what they term as all in basis.
Farmers are price-takers.

They just accept prices offered by barangay or town

buyers, which dictate the value of the fiber depending on the prevailing price. They
produce depending on what they can only harvest from the farm and not on the
market demand
ABACA
ABACA FARMERS
FARMERS
Barangay Buyers or Multipurpose Cooperatives

The barangay buyers and multipurpose cooperatives, at the same time assemblers,
COOPERATIVE
COOPERATIVE

BARANGAY
BARANGAY TRADER
TRADER

are the direct market of the abaca fibers.

Multi-purpose cooperative in the area

offers benefits to its farmer-members since they usually make efforts of proposing
TOWN
TOWN TRADER
TRADER

projects to the government such as mechanized decorticating machines available


for use for its members. They can opt to go directly to processors or still have to pass
toFIBERCRAFT
town buyers.
FIBERCRAFT

LOCAL
LOCAL
BUYERS
BUYERS

PROCESSING
PROCESSING

CORDAGE
CORDAGE

FOREIGN
FOREIGN
BUYERS
BUYERS

LOCAL
LOCAL
BUYERS
BUYERS

FOREIGN
FOREIGN
BUYERS
BUYERS

GBE
GBE

PULP
PULP

FOREIGN
FOREIGN
BUYERS
BUYERS

LOCAL
LOCAL
BUYERS
BUYERS

FOREIGN
FOREIGN
BUYERS
BUYERS

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

119

Figure 16. Commodity flow of abaca in the Bicol Region.


Town Buyer
They source out the abaca fibers either from barangay buyers or multipurpose
cooperatives then sell the abaca fibers directly to processors.
Fiber Exporters
The fiber exporters also known as grading and baling establishments (GBEs) operate
in the region specifically in the province of Albay. These establishments employ fiber
classifiers who ensure that the classified fibers are in accordance with government
standards. They likewise operate pressing machines for baling of fibers intended for
trading in both domestic and international market. The standard bale of fiber is
equivalent to 125 kilograms and measures about 100 cm x 55 cm x 60 cm.
Processors
Processors do not directly get fibers from the farmers because they claim that they
sell unclean and ungraded fibers. Aside from that, the volume that they require is not
met when fibers are sourced directly from the farmers. Abaca fibers are traded in
terms of bale equivalent to 125 kilograms of fiber per bale. This is called as baling
system.

120

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Pulp Mills
There is only one abaca pulp Company operating in the region especially in the
province of Albay - the Albay Agro-Industrial Corporation (ALINDECO). The company
have well established market networks for their pulp which are principally destined
for export.
Cordage Manufacturers
Cordage manufacturers use abaca fiber as the principal raw material for rope,
cordage and twine manufacturing.

There is currently one (1) cordage firms

operating in the region.


Fibercraft Manufacturers
The fibercraft manufacturers, including handmade papermaking is primarily
characterized as cottage-based. This sector is a major source of livelihood especially
to the women folk and out of school youth. Several of these manufacturers have
successfully established their markets abroad especially through their unique
functional and creative designs.
Handicrafts are usually processed by the fibercraft industry. They use different grades
of abaca fiber depending on the purpose and use of product that they produce.
Cordage and twine that are being produced are also used as raw materials for
basket and bags.
Logistics farm to market roads in the area are already established, albeit at a poor
stage, in Bicol including transport vehicle (e.g., jeepney) hired either by the
barangay buyer, town buyer or multipurpose cooperatives. Processors usually have
their own trucks as transport vehicle for abaca products. They also have their own
storage facilities.

Fertilizer and
Chemical Suppliers
Logistics*

Export market
(US, United Kingdom,
Europe, China, and
Japan)

Logistics*

Logistics*

INPUT
SUPPLY

PRODUCTION

Farmers

PROCESSIN
G

Pulp Mill
Cordage and Twine
Fibercrafts
- Handicrafts (bags, etc)

MARKE
T

Local Market
(Bicol, Manila,
Cebu &
Cagayan de
Oro)

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Source: Interviews with FIDA 5 focal person, farners processors and industry experts.

Figure 17. Supply chain of abaca, Bicol Region, 2008

121

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

122

Value Chain/ Cost Build-up


The total cost of producing one kilo abaca fiber is P15.33 per kg. Majority of the cost is
attributed to harvest/extraction activities which comprises 49.43% of the total cost
(P7.58 per kilogram of dried abaca fiber). Labor cost related to care and maintenance
of the plants prior to harvesting comprised 32.61% of the total cost (P5.00 per kilogram
dried abaca fiber) while cost attributed to material inputs and labor for replanting
activities comprised 16.30% of the total cost (P2.50 per kilogram of dried abaca fiber).
Additional cost for depreciation of farm implements or tools amounted to P 0.25 per
kilogram of dried abaca fiber or 1.63 percent of the total cost.
Input Supply.
All in all, abaca farmers spend P 2.08 per kilogram dried fiber for input supply
(desuckering and replanting activities). Additional cost of P0.42 per kilogram is incurred
in transporting the planting materials to the farm. As per existing practice in the region,
this is the only cost incurred by the farmers.
Other costs related to care and maintenance, harvesting and extraction and
marketing are incurred by the harvesters/strippers. In this arrangement, farmers get 30%
of the gross income while harvesters/strippers get the remaining 70%.

PRODUCTI
ON

INPUT
SUPPLY

Procurement
Procurement
and
and delivery
delivery of
of
planting
planting
materials
materials

Weeding
Weeding
Underbrushing
Underbrushing

Replanting
Replanting
activities
activities

Tumbling
Tumbling

LOGISTICS

Transport
Transport of
of
planting
planting
materials
materials

PROCESSIN
G

TRADING

Tuxying
Tuxying

MARKET

Weighing
Weighing
Classifying
Classifying
Buying
Buying
Bundling
Bundling
Selling
Selling

Stripping
Stripping
Drying
Drying
Bundling
Bundling

LOGISTICS

Transport
Transport from
from
farm
farm to
to
roadside
roadside
Transport
Transport from
from
roadside
roadside to
to
buyer
buyer

LOGISTICS

Storage
Storage
Transport
Transport to
to
exporters/
exporters/
processors
processors

Figure 18. Abaca value chain map of activities, Bicol Region, 2009.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

123

Table 9. Cost and return analysis for 1 hectare abaca plantation, Bicol Region, 2009

ITEM

UNIT
COST

UNIT

QNTY.

desuckering (for replanting)

no

500

2.50

hauling of suckers & planting

no

500

0.50

TOTAL
COST

P/kg

Material inputs:

sub-total

1,250.00

2.08

250.00

0.42

1,500.00

2.50

Labor cost:
weeding

md

200.00

1,000.00

1.67

underbrushing

md

200.00

1,000.00

1.67

tumbling

md

200.00

1,000.00

1.67

3,000.00

5.00

sub-total
Harvest/Extraction activities:
tuxying

md

200.00

800.00

1.33

stripping

md

200.00

1,800.00

3.00

drying

md

200.00

800.00

1.33

bundling

md

200.00

800.00

1.33

handling cost of fiber farm to roadside

md

200.00

200.00

0.33

transport cost roadside to trader

kg

600

0.25

150.00
4,550.0
0

0.25
7.58

sub-total
Depreciation cost:
bolo

pc

150.00

56.25

0.09

stripping knife

pc

300.00

37.50

0.06

tuxying knife

pc

150.00

sub-total

TOTAL COST

TOTAL RETURNS**

kg

600

EXPECTED NET INCOME

30.00

56.25

0.09

150.00

0.25

9,200.00

15.33

17,100.00

28.50

7,900.00

13.17

ASSUMPTIONS:
600 Kg of S-2 grade fiber a hectare/harvest
P30.00/kg prevailing price
1,800 stalks/ha at 23kg/stalk
1.4% fiber recovery
Sharing arrangement is 30% to farmer owner and 70% to harvesters/strippers
** 5% reseko deducted from total return (1.50/kg)

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

124

Farm Production.
Farm production cost of P5.00 per kilogram dried fiber which is attributed to weeding,
underbrushing and tumbling labor costs is incurred by the harvesters/strippers. All in all,
farm production incurred a total of P7.50 per kilogram of dried fiber. P2.50 per kilogram
is incurred by the farmers and P5.00 per kilogram by the harvesters/strippers.
Primary Processing.
After harvesting (tumbling), primary processing is undertaken to produce abaca fiber.
This entails additional cost of P7.00 per kilogram fiber attributed to tuxying, stripping,
drying and bundling. This is commonly incurred by the harvesters/strippers
From the farm, the harvesters/strippers shoulder the cost of handling from the farm to
the roadside (P0.33 per kilogram), fifty percent of the transport cost from the roadside
to trader (P0.25 per kilogram) and the cost attributed to reseko P1.50 per kilo which is
5% of the total weight of dried fiber.
All in all, the harvesters/strippers incurred P2.08 logistics cost and together with the
depreciation cost of farm implements/tools (P0.25 per kilogram), harvesters/strippers
incur an average cost of P16.58 per kilogram dried fiber.
Marketing.
The traders, on the otherhand, shouldered the remaining fifty percent of the transport
cost from the roadside to the trader (P0.25 per kilogram). In addition, additional cost
related to payment for the driver and fuel (P0.02 and P0.06, respectively) and labor
costs in reclassifying, bundling and handling (P0.56 per kilogram) brings the total cost
incurred by the trader to P0.81 per kilogram).
Overall, including the cost of buying a kilogram of dried fiber at P30.00 per kilogram, the
trader incurred P30.81 per kilogram of dried abaca fiber. At an average selling price of
P39.00 per kilogram, the traders profit margin is P8.19 per kilogram of dried fiber.
The logistics cost of P0.08 per kilogram dried fiber, (delivery cost from trader to exporter)
is reimbursed by the exporter.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

INPUT
SUPPLY
LOGISTICS

2.08
2.08

FARM
PRODUCTION

PRIMARY
PROCESSING

LOGISTICS

TRADER

LOGISTICS

125

EXPORTER

0.42
0.42
a
5.00
5.00a

Farm
Farm Cost
Cost
7.50
7.50

b
7.00
7.00b

Farm
Farm Yield
Yield
600
600 kgs.
kgs.

c
2.08
2.08c
c
0.25
0.25c

Harvesters/Str
Harvesters/Str
ippers
ippers Total
Total
Cost
Cost
16.58
16.58

d
Selling
Selling Price
Priced
30.00
30.00

e
0.08
0.08e

0.56
0.56

Traders
Traders
Total
Total
f
Cost
Costf
30.81
30.81

Traders
Traders
Selling
Selling
Price
Price
39.00
39.00

(a) Farm labor except marketing costs


(b) Tuxying to bundling
(c ) Farm to roadside (P0.58/kg) and reseko (P1.5/kg) are farmer's cost and roadside to
bodega is trader's cost (P0.25/kg)
(d) Harvester's Selling Price to trader
(e) Logistics cost reimbursed by buyer-exporter to trader
(f) Trader's total cost is Selling Price (P30/kg) plus labor and logistics

Figure 19. Supply/value chain cost build-up, Bicol Region, 2009

Exporters
Exporters
Buying
Buying
Price
Price
39.00
39.00

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

126

Cost Drivers
Input Supply. At the farm level, the only cost incurred by the farmers/owners are
those related to the purchase of planting materials and the labor cost in the
delivery and actual replanting activities. Of the P2.50 incurred by the
farmer/owner 83% (P2.08 per kilogram of dried fiber) went to the acquisition of
abaca suckers. The remaining 17% (P0.42 per kilogram) was spent on labor for
the delivery and replanting activities. The P2.50 per kilogram represents 12% of
the total cost incurred in farm production and processing
Farm Production. The rest of the cost related to care and maintenance of the
plants, harvesting, post-production processing and transport to traders are
attributed to the harvesters/strippers. Under this arrangement, the farmer/owner
gets 30% of the gross sales while the harvesters/strippers get 70%. In some cases, if
the owner/farmer pays for the care and maintenance of the plants (weeding
and underbrushing), the sharing arrangement becomes 50:50.
Primary Processing. The harvesters/strippers incur the cost at the farm production
and primary processing. The bulk of the cost is attributed to labor cost in
maintenance of plants (weeding, underbrushing), harvesting (topping and
tumbling) and primary processing activities (tuxying, stripping, drying and
bundling). This is approximately P12.00 per kilogram dried abaca fiber or 72% of
the total cost incurred by the harvesters/strippers. Other costs were attributed to
logistics (transport of dried fiber from farm to roadside and fifty percent of the
cost from roadside to the traders/buyers).
Market. For the traders, 70% of the cost incurred could be attributed to labor in
reclassifying, bundling and handling (P0.56 per kilogram). The rest is spent on
marketing and logistics costs.
Of the P13.17 per kilogram dried fiber net income derived, P 3.95 went to the
farmer/owner and the remaining 9.22 per went to the harvesters/strippers. On
the otherhand, the trader, after deducting all his/her expenses gets P8.19 per
kilogram net income.
Logistics. All in all, the total cost involved in logistics (transportation and storage is
P 2.83 per kilogram dried fiber. Majority (73.5%) of this is incurred by the
harvesters/ strippers (P 2.08). This includes transport from farm to roadside and

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

127

50% of the cost from the roadside to the buyers warehouse and the 5% reseko
or shrinkage from the final weight.
The cost incurred by farmers/owners is 14.84% of the total logistics cost (P 0.42 per
kilogram) in the transport of planting materials, the trader on the otherhand,
pays 8.83% of the total logistics cost (P 0.25 per kilogram) while the exporter
shoulders 2.83%
Competitive Analysis
Abaca fiber is one of the sturdiest natural fiber. Its quality is one major factor that
gives the commodity highly competitive among other natural hard fibers in any
given market. The fibers of abaca are utilized as raw materials in the pulp and
paper, cordage and twine, yarns and threads, and fibercraft business.
It is considered the strongest of natural fibers being three times stronger than
cotton and two times stronger than sisal fibers. Abaca is far more resistant to
salt water decomposition than most of the vegetable fibers, making it suitable
for rope and cordage manufacture.
Considering its prime qualities, abaca is also an excellent choice over other
natural fibers for producing thin papers of high porosity and high strength.
Abaca can also substitute for wood pulp in the manufacture of a general line of
paper products, a usage that could contribute immensely to the conservation
of the worlds diminishing forest resources.
New end-use for abaca fiber in composite applications for the automotive
industry has been developed in Europe. Abaca has very good ecological
balance combined with its excellent technical properties similar to those of glass
fiber, the material previously used in the underbody protection of the car. The
use of abaca fiber, instead of glass fiber, will bring about primary energy savings
of 60%, thus significantly reducing carbon dioxide emission.
As composite material, abaca fiber has potentials in boat/ship building industries,
aeronautics as well as in construction business especially for high-rise building

INDUSTRY PROBLEMS AND PROSPECTS

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

128

Several problems are currently hampering the development of the regional


abaca industry.
Input Supply. Low fiber yield and lack of supply of high-quality fibers due to
farmers insistence on using mixed varieties and lack of planting materials of
disease-resistant and high yielding varieties (HYVs).
Farm Production. Use of antiquated production and post-harvest practices
because of limited capital and the farmers reluctance to adopt new
technologies. In addition, the prevalence of pest and disease infestation greatly
reduces yield. Lack of post-harvest processing facilities resulting to inconsistent
quality of fibers.
Processing. Lack of organized information system, especially on the latest
recommended production and manufacturing technologies for value-added
products among field workers and farmers.
Market. Rising competition in the world market due to abaca area expansion
and more consistent fiber quality of Ecuador and the emergence of new
abaca-producing countries.
However, there are limitless opportunities for the Philippine abaca industry even
in the light of the current global economic crisis. This premise is anchored on the
following:
Go natural, Go Green is the Order of the Day. The advocacy on going natural,
going green is becoming more intense with growing

awareness and concern

to care for and protect the environment.


From a host of industrial products to home furnishings and housewares, fashion
and its accessories to packaging of food, apparels and other items, eco-friendly
materials like abaca are in greater need and importance.
The Montreal Protocol and Kyoto Protocol were signed which practically
imposed on participating countries the use of biodegradable materials to
protect ozone layer and tackle the issue of global warming and greenhouse gas
emission.

129

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Abaca as a renewable resource can be an excellent part of the overall solution


to climate change as the plant absorbs more carbon dioxide than its emission
and is hundred percent biodegradable that cannot harm the environment.
Abaca for Composite. The development of new end-use for abaca fiber in
composite applications for the automotive industry in Germany contributed to
boost the demand for the fiber. The car manufacturer, Chrysler-Daimler, cited
the very good ecological balance of abaca combined with its excellent
technical properties similar to those of glass fiber, the material previously used in
the underbody protection of the car. The use of abaca fiber, instead of glass
fiber, brought about primary energy savings of 60%, thus significantly reducing
carbon dioxide emission.
Other car manufacturing companies especially in the European Union are
expected to use natural fibers as material for their car parts in compliance with
the End-of-Life-Vehicle Regulation of the European Parliament.

The said

Regulation requires them to dispose of at the end of life of their vehicle.


As composite material, abaca fiber has potentials in boat/ship building industries,
aeronautics as well as in construction business especially for high-rise building.
Abaca Cordage. With the stricter policies against dumping of synthetic fishnets
and cordage materials in open sea as enforced by most European nations, uses
are returning to the use of natural biodegradable materials like abaca fiber.
Although synthetic ropes have some technical advantages over abaca ropes,
abaca has qualities that meet the needs for special purposes specifically for oil
drilling/exploration, navies, merchant shipping and construction.
Compared to sisal, its closest competitor among natural fibers, abaca has
superior tensile strength. One of the rope makers noted that the strength of sisal
rope is 20% less than abaca rope, hence, abaca ropes is much preferred in
business where the strength of the material to be used is of prime consideration.
The movie-making industry in the United States is reportedly using abaca rope
which, unlike synthetics, does not reflect when exposed to klieg lights.

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

130

Abaca Pulp. The expanding demand for specialty papers for tea bag, meat and
sausage casings, currency papers, metallized papers, cigarette papers, filters, hitech capacitor papers and other non-wovens and disposables also mean high
demand for abaca pulp.

Most specialty papers require high porosity and

excellent tear, bursting and tensile strength which characterize abaca fiber.
Compared to synthetics, abaca is preferred especially in the production of meat
and sausage casings and tea bags because they do not dissolve when in
contact with boiling water and pose no danger to health when pieces of fibers
are mistakenly eaten.

It is for these reasons as well as the very stringent

specifications on strength, elongation and formation required to ensure correct


performance on automatic filling machines that these casings are made entirely
of abaca. Meat/sausage casings and tea bags are the two major markets for
abaca pulp.
As the environmental movement picks up steam, many countries are becoming
more protective of their ecology, particularly timber forest, the source of wood
pulp which is the traditional material for pulp and paper production.

This

provides an entry point for substitutes such as abaca.


Japan continues to import abaca pulp from the Philippines for the manufacture
of its currency notes (yen).

The Japanese bills of Y10,000, Y500 and Y1,000

denominations have 60% abaca components.

Other applications of abaca

pulp in Japan include capacitor and insulation papers, tea bag, masking tape,
paper cloth, stencil paper, filter oil absorbent paper, casings and other specialty
paper products.
Abaca pulp remains a good substitute for coniferous pulp in most paper
products on the ratio of 4:1.

Majority of the worlds pulp and paper

manufacturing companies use wood pulp, including more than 20 pulp and
paper mills in the Philippines. The market, however, has still remained untapped
due to the relatively high price of abaca pulp compared to wood pulp.
China as New Market for Abaca Pulp. China is expanding its imports of abaca
pulp from the Philippines for the manufacture of tea bags. With the opening of

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

131

the Chinese economy following Chinas membership to the WTO in 2001, the
influence of the western world to the community has become apparent.
The Chinese especially the younger generation are now changing their lifestyle,
one of which is the use of tea bags instead of the traditional way of preparing
tea prompting business establishments in China to serve tea in tea bags. China
has one of the biggest tea-drinking populations in the world.
Abaca in Fibercrafts. Innovative and functional fibercrafts from abaca have
continued to evolve and introduced in both the local and international markets
with the Filipino intrinsic artistry, ingenuity and world-class craftsmanship coupled
with the versatility of abaca fiber.
The Gifts, toys and Housewares (GTH) sector has made wider use for abaca
especially for home furnishings, house decors and accessories and fashion as
well.
For the local fibercraft and weaving industries, high grades abaca fiber and
knotted abaca are the most highly valued commodities as demand for such
materials has been on the rise not only in the local market but also in China, now
considered as the biggest competitor for the supply of semi-processed fiber.
Abaca as Wellness Product. The cosmetic industry also makes use of abaca
enzymes in the production of natural, organic, hand-crafted skin care products
like abaca soap and lotion which reportedly have anti-aging and therapeutic
properties and are now exported abroad.
Abaca for Fashion. The use of abaca, in pure or in blends with other natural fibers
like pia fiber and pineapple silk, for textile is another opportunity.
The recently-concluded Philippine Fashion Week presented contemporary and
wearable collection fashioned from these fibers, veering away from the
traditional cultural ensemble, appealing and acceptable to both the young
and old generations.
Other New Uses. Researches on product development could further open up
more opportunities for abaca fiber especially as cement laminas which can be

132

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

used for making wall panels most suitable in the construction of high-rise
buildings. In addition, abaca fiber can be utilized as composite material (abaca
fiber blended with cement) for the construction of boats and as raw material
component for apparels like organic denims
CONCLUSIONS AND RECOMMENDATIONS
The following are the areas that need improvement in the supply/value chain
system of abaca in Bicol region:
Input Supply. Majority of the abaca planted in the region is the Lausigon
variety with an average yield of 600 to 700 kilograms dried fiber per year.
However, there are available high yielding and disease resistant varieties of
abaca with a potential yield of 1,600 kilograms of dried fiber per year.
Farmers/owners

should

consider

investing

in

the

replacement

of

old,

unproductive and disease infected plants with these high yielding varieties to
improve yield.

Provision of delivery
vehicles

Storage/ classifying
buildings

Use of disease
resistant and high
yielding varieties

Mechanization of
fiber extraction
Value-adding
(fibercraft
manufacturing)

INPUT
SUPPLY

PRODUCTION

LOGISTICS

Proper Fertilization
Appropriate culture
and management
strategies

PROCESSING

LOGISTICS

TRADING

MARKET

Collective marketing
Direct marketing
Fiber classifying

Tumbling
Provision of hauling
vehicles

Figure 20. Suggested interventions along the supply chain system of abaca, Bicol Region, 2010.

Production. The abaca industry in the region suffers from low productivity, thus,
improvement in the productivity of the abaca farms should be considered. The
average yield in the region is only 600 kilograms dried fiber which is lower than
the national annual average of 700 kilograms and the potential yield of 1,600
kilograms per year. Increase in the productivity could be attained thru use of

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

133

high yielding varieties, proper fertilization (12 bags per year), pest management
strategies and appropriate culture and management practices (i.e. proper
population density, organic-inorganic fertilization, etc.).
Processing. In the farm level, only primary processing (fiber extraction) is
undertaken. Improvement in the processing subsector could be attained thru
mechanization in fiber extraction to improve fiber recovery from the existing 1.4%
to 1.5%. In addition, mechanization will lessen labor cost and improve the quality
of fibers recovered resulting to higher fiber prices.
To increase income thru processing, cooperatives should diversify their business
(forward and backward integration) and venture into processing machinery
rental business, providing short term loans to members (agricultural inputs) and
value-adding (fibercraft manufacturing) activities
Marketing. The marketing of abaca fiber in the region is multi-layered, complex
and costly. Community-based buyers such as multi-purpose cooperatives should
intensify their effort for collective marketing in order to command a better price
for the farmers products.
In addition, the cooperatives, if they met the required volume, could deal
directly with the exporters and processors and avail of the higher price and
additional incentives offered by the exporters. Multi-purpose cooperatives could
venture into fiber classifying to be able to avail of the higher price of different
fiber grades.
Logistics. The distance of the farms to the town traders, exporters and processors
drives logistics costs up. This is in addition to the poor state of farm to market
roads in the countryside particularly in Bicol region. Reduction in transportation
and delivery costs could be attained thru the provision of hauling/delivery
vehicles and storage/classifying buildings to cooperatives. In addition, the
existing arrangement with the buyers to shoulder majority of the logistics
(transportation) costs incurred should be maintained.

134

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 1. Abaca Production in Metric Tons by Region, Philippines, 1999-2008


1999
Philippines
CAR (Cordillera Administrative
Region)

2000

2001

2002

2003

2004

2005

2006

2007

73,125.24 77,179.86 72,860.79 63,027.54 69,764.72 74,464.86 74,014.00 69,802.00

2008

66,437.23 68,385.77

6.98

14.00

14.05

13.07

Region I (Ilocos Region)

Region II (Cagayan Valley)

15.00

3.56

3.35

9.90

6.22

12.75

30.62

48.00

52.50

79.50

51.85

24.37

51.00

43.39

40.79

37.30

35.15

37.61

55.11

67.00

69.47

71.79

Region III (Central Luzon)


Region IV-A (CALABARZON)
Region IV-B (MIMAROPA)
Region V (Bicol Region)

19,909.90 21,432.32 20,086.14 17,942.14 20,243.00 21,946.60 19,933.61 20,328.00

17,144.52 18,363.17

Region VI (Western Visayas)

620.07

462.95

530.63

447.25

851.27

789.80

1,130.68

1,579.00

1,337.87

1,679.24

Region VII (Central Visayas)

207.47

216.12

161.93

163.96

190.90

310.64

605.50

390.00

470.17

731.30

Region VIII (Eastern Visayas)


Region IX (Zamboanga
Peninsula)
Region X (Northern Mindanao)
Region XI (Davao Region)
Region XII (SOCCSKSARGEN)
CARAGA Administrative Region
ARMM (Autonomous Reg. of
Muslim Mind.)

28,739.30 30,174.06 29,952.46 27,011.81 29,260.62 27,250.34 29,117.26 25,788.00

24,752.39 23,779.44

241.62

187.41

168.46

110.72

123.30

113.43

148.35

113.00

221.16

177.10

2,003.47

2,037.19

2,094.40

1,184.68

1,139.82

1,267.46

1,765.85

1,553.00

1,569.48

1,614.85

10,622.71 10,781.98

8,644.85

8,031.86

9,196.99 12,185.58 10,296.34

8,901.00

9,554.47 10,247.15

553.70

411.18

1,317.95

535.89

985.14

816.11

866.02

709.00

726.81

740.99

4,909.29

6,480.77

3,669.84

3,548.72

3,784.64

4,842.78

5,578.07

5,674.00

5,834.96

6,084.38

5,251.70

4,948.96

6,189.98

4,003.32

3,947.65

4,891.76

4,479.61

4,602.00

4,637.53

4,779.42

Source: Bureau of Agricultural Statistics (BAS)

135

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 2. Abaca Production (MT) by Province in Bicol Region, 1999-2008


1999
2000
2001
2002
19,909.90 21,432.32 20,086.14 17,942.14
Albay
1,795.90 1,755.02 1,168.39 589.34
Cam. Norte
5.10
6.65
6.55
41.29
Cam. Sur
2,112.00 2,423.35 2,266.29 781.61
Region V

2003
2004
2005
2006
2007
2008
20,243.00 21,946.60 19,933.61 20,328.00 17,144.52 18,363.17
1,297.87 1,496.70 1,533.04 1,482.00 1,377.54 1,404.64
67.36
46.75 137.03 127.00 155.21
188.00
1,464.01 921.84 661.00 446.00 273.35
390.39

Catanduan
11,073.10 12,406.05 11,307.06 14,766.25 15,201.76 17,246.47 15,160.04 16,136.00 13,615.41 14,506.40
es
Masbate
Sorsogon

.
.
.
.
.
.
.
.
.
.
4,923.80 4,841.25 5,337.85 1,763.65 2,212.00 2,234.84 2,442.50 2,136.00 1,723.01 1,873.74

Source: BAS

Table 3. Area Harvested (has.) for Abaca in Bicol Region, 1999-2008


1999
Region V
42,628.0
Albay
4,237.0
Cam. Norte
900.0
Cam. Sur
7,339.0
Catanduanes 19,000.0
Masbate
.
Sorsogon
11,152.0
Source: BAS

2000
41,593.0
2,950.0
850.0
7,436.0
20,307.0
.
10,050.0

2001
41,593.0
2,950.0
850.0
7,436.0
20,307.0
.
10,050.0

2002
44,606.1
4,914.4
988.5
6,715.9
21,812.0
.
10,175.3

2003
43,317.8
4,823.6
993.9
6,705.0
21,877.3
.
8,918.0

2004
42,180.8
5,135.9
1,013.0
6,563.4
22,184.3
.
7,284.3

2005
42,832.0
5,369.5
1,024.2
6,679.1
22,384.0
.
7,375.2

2006
42,832.0
5,369.0
1,025.0
6,679.0
22,384.0
.
7,375.0

2007
42,663.0
5,300.0
1,024.0
6,679.0
22,384.0
.
7,276.0

2008
42,662.0
5,300.0
1,023.0
6,679.0
22,384.0
.
7,276.0

136

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

1999
Philippines

2000

2001

2002

2003

111,384.0 106,816.0 107,145.0 121,940.8

2004

2005

121,476.0 127,461.0

2006

2007

135,965.7

135,883.0

2008

136,048.7 137,519.7

CAR (Cordillera
Administrative
Region)

800.0

800.0

600.0

870.0

Region I (Ilocos
Region)

0.5

0.5

Region II (Cagayan
Valley)

Region III (Central


Luzon)

85.0

85.0

85.0

120.2

191.4

183.9

233.9

434.0

480.0

508.0

Region IV-A
(CALABARZON)

22.0

22.0

22.0

26.3

26.0

26.0

26.3

109.0

199.1

294.2

Region IV-B
(MIMAROPA)

80.0

176.0

176.0

406.0

608.4

850.0

1,119.1

1,134.0

1,122.0

1,127.0

42,628.0

41,593.0

41,593.0

44,606.1

43,317.8

42,180.8

42,832.0

42,832.0

42,663.0

42,662.0

Region VI (Western
Visayas)

7,154.0

4,832.0

4,834.0

3,485.5

3,515.3

3,823.6

4,260.2

4,151.0

4,020.0

4,001.0

Region VII (Central


Visayas)

2,734.0

2,648.0

2,645.0

2,469.8

2,560.8

2,707.1

3,083.9

3,084.0

3,087.0

3,097.0

Region VIII (Eastern


Visayas)

29,560.0

28,503.0

28,498.0

38,078.7

38,665.0

42,069.4

44,952.5

44,777.0

45,068.2

44,943.2

942.0

898.0

920.0

907.1

1,065.1

1,645.2

1,728.4

1,874.0

1,885.0

1,869.0

Region X (Northern
Mindanao)

3,487.0

2,917.0

2,955.0

4,139.2

4,402.9

4,822.1

4,970.8

4,988.0

4,993.0

4,990.0

Region XI (Davao
Region)

7,596.0

7,799.0

7,810.0

9,301.4

9,775.6

10,476.5

10,952.7

10,088.0

10,120.2

10,777.0

Region XII
(SOCCSKSARGEN)

1,572.0

1,471.0

1,448.0

2,668.6

2,827.3

3,331.6

3,893.9

3,949.0

4,018.0

4,555.0

CARAGA
Administrative
Region

5,803.0

6,151.0

6,348.0

6,121.8

6,301.0

7,746.0

9,181.2

9,735.0

9,891.0

9,912.0

ARMM (Autonomous
Reg. of Muslim Mind.)

9,721.0

9,721.0

9,811.0

9,610.2

8,219.4

7,598.7

7,930.1

7,927.0

7,902.2

7,914.3

Region V (Bicol
Region)

Region IX
(Zamboanga
Peninsula)

Table 4. Area Harvested (has.) for Abaca in the Philippines,1999-2008


Source: BAS

137

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 5. Productivity (MT/ha.) of Abaca Farms in the Bicol Region, 1999-2008


Region V
Albay
Cam. Norte
Cam. Sur
Catanduanes
Masbate
Sorsogon

1999
0.47
0.42
0.01
0.29
0.58

2000
0.52
0.59
0.01
0.33
0.61

2001
0.48
0.40
0.01
0.30
0.56

2002
0.40
0.12
0.04
0.12
0.68

2003
0.47
0.27
0.07
0.22
0.69

2004
0.52
0.29
0.05
0.14
0.78

2005
0.47
0.29
0.13
0.10
0.68

2006
0.47
0.28
0.12
0.07
0.72

2007
0.40
0.26
0.15
0.04
0.61

2008
0.43
0.27
0.18
0.06
0.65

0.44

0.48

0.53

0.17

0.25

0.31

0.33

0.29

0.24

0.26

Source: BAS

Table 6. Annual domestic consumption of abaca fiber by sector, 2000-2008.


Year
2000

TOTAL
50,077

PULP
30,960

2001

52,012

2002

CORDAGE
12,227

FIBERCRAFTS
6,890

32,818

11,615

7,579

48,230

33,610

10,600

4,020

2003

52,560

36,095

12,105

4,360

2004

50,900

37,600

9,250

4,050

2005

59,170

44,470

9,840

4,860

2006

56,175

40,200

10,625

5,350

2007

47,362

30,312

12,950

4,100

51,722

38,702

10,120

2,900

2008
Source: FIDA 5

YARNS & TWINES

Table 7. Annual world consumption of abaca (in metric tons), 2000-2009

Year

World
Demand
2000
81,981
2001
76,259
2002
74,989
2003
81,054
2004
84,375
2005
82,708
2006
79,312
2007
71,169
2008
77,066
Source: FIDA 5

Export
19,383
12,392
14,008
16,251
19,310
13,684
12,887
13,731
13,386

PHILIPPINES
Local
Total
Consumption
50,077
69,460
52,012
64,404
48,230
62,238
52,560
68,811
50,900
70,210
59,170
72,854
56,175
69,062
47,362
61,093
51,722
65,108

% Share
84.7
84.5
83.0
84.9
83.2
88.1
87.1
85.8
85.7

ECUADOR
Exports
% Share
12,521
11,855
12,751
12,243
14,165
9,854
10,350
10,075
11,958

15.3
15.5
17.0
15.1
16.8
11.9
12.9
14.2
14.3

138

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 8. Annual Export Earnings from Abaca and Manufactures (in FOB US$), Philippines
2000-2009
Year

Total

Fiber

86,792,00
2000

2001

2002

2003

2004

2005

2006

2007

2008

Pulp

18,099,23
0

71,450,75

8,900,71

68,582,49

9,190,82

78,171,27

10,692,63

73,513,56

14,147,43

86,718,65

12,084,71

90,681,10

12,820,69

79,349,91

13,489,01

99,462,99

12,648,884

219,988

15,713,046

439,034

9,064,184

317,865

10,241,644

289,263

11,454,093

480,102

11,478,758

429,417
1,110,55

21,485,46
15,155,64
15,105,63
9,570,63
11,714,91
13,386,36

39,083,93
7

22,232,83
5

217,756

52,539,85
0

11,295,220

52,388,12
4

40,413,44
7

545,114

36,220,92
4

20,744,26
11,454,331

31,367,14
6

Fibercrafts

29,551,59
8

Yarns &
Fabrics

35,949,06
9

Cordage
Ropes &
Twines

13,950,79

57,346,58
2

13,824,592

4,948,42
8

Source: FIDA 5

Table 9. Annual exports of abaca fiber by country of destination (in metric tons), 20002009

139

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Averag
e

%
Shar
e

19,38
3

12,39
2

14,00
8

16,25
1

19,31
1

13,68
4

12,88
8

13,73
1

13,88
5

7,223

14,276

100.0

5,021

2,851

1,168

29

20

26

50

22

919

6.4

5,021

2,851

1,168

29

20

26

50

22

919

6.4

EUROPE
United
Kingdom

7,871

4,409

7,655

9,686

6,650

6,731

6,328

6,326

3,238

7,019

49.2

7,871

4,409

7,655

9,686

11,29
7
11,29
7

6,650

6,731

6,328

6,326

3,238

7,019

49.2

ASIA
Japan
India
China
Indonesi
a
South
Korea

6,301
6,192
34
-

5,031
4,634
114
13

4,966
4,470
123
69

6,057
5,261
102
222

7,636
6,697
147
585

6,882
6,163
139
405

6,021
5,172
209
563

7,179
5,277
136
1,627

6,936
5,288
79
1,384

3,467
1,502
125
1,770

6,048
5,066
121
664

42.4
35.5
0.8
4.6

44

270

293

451

169

132

68

139

75

70

171

1.2

31

11

21

38

43

15

0.1

190

101

221

479

378

132

110

523

250

1.8

Destinatio
n
TOTAL
NORTH
AMERICA
United
States

OTHER
COUNTRIES

174

192

Source: FIDA 5

Table 10. Annual exports of abaca pulp by country of destination (in metric tons), 20002008
Destination
TOTAL
NORTH
AMERICA
United States

EUROPE
Germany
United
Kingdom
France

ASIA
Japan
Taiwan
South Korea
China
OTHER
COUNTRIES
Source: FIDA 5

2000

2001

2002

2003

2004

2005

2006

15,
664

15,
142

16,3
06

18,
934

20,4
70

23,2
88

22,5
26

7
28
7
28

6
15
6
15

36
3
36
3

3
71
3
71

47
7
47
7

83
7
83
7

95
7
95
7

9,
426
5,
955
2,
078
1,
393

9,
941
5,
431
2,
961
1,
549

11,5
40
5,4
79
4,3
71
1,6
90

13,
193
6,
760
4,
376
2,
057

15,0
96
7,9
45
4,9
88
2,1
63

15,8
36
8,5
33
5,5
00
1,8
04

16,7
57
9,3
49
5,5
23
1,8
85

5,
366
4,
918
1
10

4,
497
4,
129
1
48

5,
290
4,
649
2
20

98
2
41

78
1
42

4,2
87
3,8
10
19
8
7
9
20
1

28
3
94

4,7
18
4,2
49
11
8
1
5
33
6

6,4
82
5,6
80
30
2
3
6
46
4

4,1
29
3,6
11
22
4
4
7
24
7

1
43

89

11
5

80

17
9

13
3

68
3

2007

2008

18,26
0

18,10
3

Average

%
Share

16,869

100.0

593

3.5

593

3.5

779

8
04
8
04

12,68
7

11,53
2

11,601

68.8

7,673

7,293

6,442

38.2

2,941

2,680

3,542

21.0

2,073

1,478

1,609

9.5

4,505

5,746

4,502

26.7

3,931

3,595
1
41

3,857

22.9

166

1.0

39

0.2

484

1
3
52

286

1.7

170

21

161

1.0

779

203
7

Table 11. Annual exports of abaca cordage and allied products (in metric tons) by
country of destination, 2000-2008

140

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Destinatio
n

2000

2001

2002

2003

2004

2005

2006

2007

2008

TOTAL

8,257

7,464

7,329

8,834

6,365

7,196

8,300

9,481

United States

5,533

4,892

5,059

5,896

4,073

4,595

5,095

Canada

234

213

182

280

240

373

Germany

136

119

116

197

182

150

Australia

96

59

156

104

126

484

363

370

466

156

124

82

1,618

1,694

1,364

Singapore
Malaysia
Other
Countries

Averag
e

%
Share

7,475

7,856

100.0

6,471

4,916

5,170

65.8

251

237

155

241

3.1

224

201

160

162

2.1

89

172

56

43

100

1.3

392

369

537

781

523

476

6.1

310

105

109

217

241

151

166

2.1

1,581

1,247

1,511

1,803

1,495

5,203

1,946

24.8

Source: FIDA 5

Table 12. Annual exports of abaca fiber (in square meters) by country of destination,
2000-2008
Destina
tion

TOTAL

2000

2001

2002

2003

2004

99,420

19,699

120,261

113,614

110,970

2005

2006

2007

2008

185,450

350,078

629,656

698,335

Averag
e

%
Shar
e

232,748

100.0

United
States

4,405

1,524

3,808

277

226

29,706

80

4,003

1.7

Japan
United
Kingdom

2,256
27,56
8

3,224

476

2,542

10,012

182

2,226

2,984

15,044

3,895

1.7

3,408

7,731

11,516

10,653

5,687

49

1,179

7,203

7,499

3.2

France

110

292

366

1,627

495

1,467

3,554

Korea

113

Australia
Hong
Kong
Spain
Italy
Netherlan
ds

3,536
-

4,034

1,195

0.5

667

67

0.0

365

0.2

1,872

14,284

145,249

406,514

455,051

102,297

44.0

4,111

15,390

15,837

4,054

1.7

160,872

87,657

37.7

1,485
60,53
1

884

2,019

810

11,665

87,192

81,070

88,760

133,445

156,169

96,869

857

656

151

0.1

Lebanon

638

737

773

215

0.1

China

16,002

Nigeria
Other
Countries

226

121

2,095

Source: FIDA 5

5,715

68,656

27,019

11,739

5.0

9,347

19,892

25,089

13,716

13,675

8,172

3.5

285

1,646

10,441

1,481

0.6

141

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Table 13. Average annual farmgate price of abaca fiber, 1999-2008


1999
20.16

2000
18.69

2001
15.16

2002
17.24

Annual
2003
2004
19.75 25.41

2005
32.82

2006
34.78

2007
34.17

2008
44.06

21.56

20.36

17.23

19.94

22.60

27.30

35.16

35.21

30.84

47.76

Albay

16.94

17.03

17.11

17.08

17.55

18.46

22.22

26.51

62.83

Camarines Norte

18.91

21.13

18.64

15.76

15.53

Camarines Sur

33.61

32.93

27.84

26.58

27.36

30.75

35.65

36.82

41.08

45.37

Catanduanes

25.29

25.32

19.31

21.60

24.82

30.03

37.54

36.46

30.51

47.15

Masbate

Sorsogon

17.61

15.18

12.57

12.70

15.24

22.23

25.25

31.58

32.67

44.69

Philippines
Region V (Bicol
Region)

Source: BAS

142

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

REFERENCES:
ABEJERO, RAMESES, SR. Mauswagon Credit Cooperative.
February 1, 2010

Palanas, Masbate.

HUYO-A, ROLANDO. LGU Focal Person. Cataingan, Masbate


MANUEL, CHRISTIAN. Cawayan Cassava Planters Association.
Masbate. February 1, 2010-05-07

Cataingan,

MERCADO, JERRY. Manager. Maymatan Farmers Multipurpose Cooperative.


Goa, Camarines Sur. January 21, 2010.
STA. ANA, LEVI. Chairman. Liga ng mga Barangay Multipurpose Cooperative.
Calabanga, Camarines Sur. January 21, 2010
www.bas.gov.ph
www.bico.da.gov.ph
ATTACHMENTS:
Costs and Return Analysis of the Cooperatives
REFERENCES:
ABIN, MARILYN.
Coconut Farmer.
RNAFS Multi-Purpose Coop.
Camarines Sur. January 21, 2010.

Ragay,

ARBOLEDA, JUSTINO. Juboken Enterprises. Camalig, Albay.


BONSOBRE, MARIFE. Coop President. P4MP Federation. Uson, Masbate. January
21, 2010.
CANADA, JULIAN. Coop Manager. Basud Federation of Pineapple Growers
Association. Basud, Camarines Norte. January 19, 2010.
CALIMOTAN, Isidro. Coconut Farmer/Coop President. Aroroy Coconut Farmers
Association. Aroroy, Masbate. January 31, 2010.
CANDELARIA, WINNIE. Coop President.
Camarines Sur. January 21, 2010.

RNAFS Multi-Purpose Coop.

Ragay,

CAPINING, ARNOLD. LGU SAIS-BC Focal Person. Aroroy Coconut Farmers


Association. Aroroy, Masbate. January 31, 2010.
DE CASTRO, DANTE. LGU Focal Person.
Camarines Sur. January 21, 2010.

RNAFS Multi-Purpose Coop.

DE LIMA, EBELEN. Coconut Farmer. RNAFS Multi-Purpose Coop.


Camarines Sur. January 21, 2010.

Ragay,
Ragay,

DELA PEA-RODRIGUEZ, Mary Grace. 2008. Supply Value Chain and


Benchmarking Analyses of the Coconut and Abaca Industries in Bicol Region.

143

Supply/Value Chain Analyses of Four (4) Commodities (Abaca, Coco-Coir, Cassava and Queen Pineapple)
Under the RP-SPAIN, SAIS-BC Project

Masters in Applied Business Economics Food Systems Management. University


of Asia and the Pacific.
DIN, IRENEO. Coop President. Castilla Development Coop. (CADECO). Castilla,
Sorsogon. January 27, 2010.
HILA, REYNALDO. Coconut Farmer/Coop President.
Cooperative. Sorsogon City. January 7, 2010

Maharlika Development

MARTINEZ, IIGO. LGU Focal Person. Iriga Farmers Development Coop. Iriga
City. January 21, 2010.
OCTA, FIDEL. LGU Focal Person. Basud, Camarines Norte
PHILIPPINE COCONUT AUTHORITY Mr. E. Allorde and Engr. A. Trespeces. Legazpi
City
YEE, MELINDA. LGU Focal Person. Maharlika Development Cooperative Sorsogon
City. January 7, 2010
www.bicolda.gov.ph

ATTACHMENTS:
Coco Roadmap
Costs and Return Analysis of the Cooperatives

8.00

130.00

180.00