Prospect and Perspective of the Seaweed Industry for Building Capacities of Local Communities to Cope with Globalization

Seaweed Industry Association of the Philippines

Legend:

% Production

----- Highly-developed 88% ----- Semi-developed 10% ----- Under-developed 2%

Commercial Species of Seaweed in the Philippines

Carrageenan Bearing Red Seaweed

Eucheuma Cottonii Eucheuma Spinosum

Agar-Agar Bearing Red Seaweed

Gracilaria Gelidium

Types of Carrageenan Extracted

Eucheuma Cottonii Kappa

Applications

Dairy Products Meat and Poultry Water gels Processed Human foods & Pet Foods Pharmaceutical Personal Care

Eucheuma Spinosum Iota

Applications

Toothpaste Other Dairy Products Pharmaceutical

Products Produced by the Philippines(Eucheuma)

Refined Carrageenan Semi-Refined Carrageenan Food Grade Semi-Refined Carrageenan Pet Food Alkali Treated Chips Raw Dried Seaweed

Philippine Position to World Market

Refined Carrageenan No. 4 Semi-Refined (Foodgrade) No. 1 Semi-Refined (Pet Food) No. 2 Alkali Treated Chips No. 1 Raw Dried Seaweed No. 1

Countries Producing Eucheuma Seaweed

Philippines 72%
Cottonii 97.7% Spinosum 2.3%

Indonesia 22%
Cottonii 92.3% Spinosum 7.7%

Malaysia 2.7%
Cottonii 100%

Zanzibar 3.3%
Cottonii 23% Spinosum 77%

Philippine Exports as of 2003

Raw Dried Seaweed

Volume, 27,540.0 M/tons Value, US$15,067,330.00

Refined Carrageenan
Volume, 4,874.0 M/tons Value, US$41,421,745.00

Semi-Refined Carrageenan
Volume, 22,201.0 M/tons Value, US$87,103,214.00

World Demand on Eucheuma Seaweed

Specie of Seaweed
Eucheuma Cottonii Eucheuma Spinosum

2001

2002

2003

169,000m.t. 180,000m.t. 220,000m.t . 15,000m.t. 18,000m.t. 22,000m.t.

Projected increase in demand: E. Cottonii 10% Annually E. Spinosum 7% Annually

World Supply Situation

Countries
Philippines
a. Cottonii b. Spinosum 118,460.0 m.t. 4,120.0 m.t. 125,254.2 m.t. 5,500.0 m.t. 127,693.2 m.t. 3,000.0 m.t.

2001

2002

2003

Indonesia
a. Cottonii b. Spinosum

28,797.80 m.t. 3,460.00 m.t. 741.95 m.t. 2,483.90 m.t. 3,225.85 m.t.

35,605.35 m.t. 3,800.00 m.t. 921.30 m.t. 2,561.00 m.t. 3,582.30 m.t.

36,834.10 m.t. 3,100.00 m.t. 1,378.00 m.t. 4,613.00 m.t. 4,900.00 m.t.

Zanzibar
a. Cottonii b. Spinosum

Malaysia
a. Cottonii

Total
a. Cottonii b. Spinosum

151,225.60 m.t. 10,063.90 m.t.

165,560.15 m.t. 11,861.00 m.t.

170,805.30 m.t. 10,713.00 m.t.

World Market FOB Price

Specie of Seaweed

2001
US$650.00/ Metric ton

2002
US$700.00/ Metric ton

2003
US780.00/ Metric ton

Cottonii

Spinosum

US$250.00/ Metric ton

US$250.00/ Metric ton

US$230.00/ Metric ton

World Market FOB Price

PRODUCT Refined Carrageenan SRC-Food Grade SRC-Pet Food ATC PRICES PER KILO US$11.00 US$6.00 US$3.25 US$2.80

World Market Trend

There is high demand on Eucheuma Cottonii than Spinosum. Carrageenan Market for Kappa is big, making eucheuma cottonii seaweed high. There is more available supply of spinosum against demand. Demand for eucheuma seaweed continuous when prices is competitive & quality is good.

The Prospect of the Seaweed Industry In the Philippines

Supply and demand situation in the Philippines for Cottonii.

Year Supply
127,693.22
Metric Tons

Demand
155,000.0
Metric Tons

Shortage
27,306.78
Metric tons

2003

The annual increase in demand is 10%

Philippine advantage over other countries.

Cottonii quality is higher both in recovery and viscosity. Philippine has wider coastal areas and sea water is more suitable to eucheuma cottonii culture. Filipinos are used to sea type of livelihood. Advance technology on farming and extraction of carrageenan. There are 3 Refineries and 12 Semi-Refined Processing plants for Carrageenan. Philippine and private sector forged a partnership agreement to develop the seaweed industry. SIAP is a member of Marinalg International that helps solved Non-Tariff Barriers for Carrageenan.

What action to take?

Focus in seaweed production development to fill the shortage of supply on raw eucheuma cottonii. Research and Development program for good quality seaweed production and more product applications for carrageenan. Strengthen organization of industry players, seaweed farmers, traders and processors to maintain good quality seaweed for carrageenan production. Government full support to the industry needs.

Non-Traditional Areas Intensive Seaweed Production Program Chart

PSDC
(Provincial Seaweed Development Council)

Orient LGU on Seaweed Farming Development

Conduct Technology Seminar & put up one Block Module (10m. X 25m.) to PSFTA

Municipal Government

LGU organize PSTFA Municipal Chapter

Fishermens Group
Commercial Farming Starts 60 days after Block module was set

Zone Municipal Waters & Enact Seaweed Culture Ordinance

Issue Permit to Culture Seaweed to Seaweed Farmers

SIAP PROPOSAL ON BFAR NURSERY FARMS

Use the nursery farms as techno demo module in new municipalities targeted for development. Award 250 square meters module to an interested family beneficiary & operate to own. Make this as show case to others and a good venue for lakbay aral training once successful. This can also serve as initial source of seedlings for further development of the area. BFAR training funds can be used in training beneficiaries.

TARGETED AREAS FOR DEVELOPMENT

14 New Provinces
Sultan Kudarat, South Cotabato, Sarangani, Agusan del Norte, Misamis Oriental, Siquijor, Biliran, Capiz, Aklan, Romblon, Oriental Mindoro, Catanduanes, Albay & Aurora

36 Provinces for Expansion

Sulu, Basilan, Maguindanao, Davao del Sur, Davao City, Davao Oriental, Agusan del Sur, Surigao del Sur, Surigao del Norte, Camiguin, Lanao del Norte, Misamis Occidental, Zamboanga del Norte, Bohol, Cebu, Negros Oriental, Southern Leyte, Leyte, Eastern Samar, Western Samar, Northern Samar, Iloilo, Guimaras, Antique, Negros Occidental, Masbate, Sorsogon, Camarines Sur, Camarines Norte, Quezon, Marinduque, Occidental Mindoro, Palawan, Batangas, Zamboanga del Sur & Pangasinan

FINANCING COMPONENT
LBP QUEDANCOR
Initiate Loan Application (Loan issued not in cash but materials)

Issue Permit to operate business

Leader/ Trader SIAP

Prepare farmers information sheet for loan application Issue Accreditation Papers & Market Linkage to Processors

LGU
Issue Permit on Seaweed Culture

FARMERS

ROLE OF LANDBANK & QUEDANCOR

LANDBANK
Process & Release Loan Rediscount Loans

QUEDANCOR
Process & Release Loan

COOP
Prepares Application & Release Loan (Materials not cash)

LEADER/ MUNICIPAL TRADER

Prepares Application & Release Loan (Materials not cash)

FARMERS

FARMERS

FINANCING LOAN TO TRADERS

Payment of deliveries Directly paid

LAND BANK QUEDANCOR

Excess from Loan Is returned

PROCESSORS Raw Exporters

Delivers Seaweed under Marketing Agreement And Purchase Order

Inspect Inventory of seaweed

TRADERS

SIAP ORGANIZATION AND ACREDITATION PROGRAM

SIAP Carrageenan Processors
Accredited

Raw Seaweed Exporter

Certifying Office PSFTA

Certifying Office SIAP

Provincial Traders Municipal Traders Farmers

Accredited

Certifying Office Municipal Chapter PSTFA

Accredited

SIAP SOCIAL PROGRAM

Force Savings Land Bank
Authorize to collect deposits Individual Farmers Savings Account Register Farmers & Remit Monthly Premium

PHILHEALTH

S.S.S.

Municipal Traders
Deduct 10% of farmers sales for deposit Collect Monthly Premiums

Farmers

As a result.

Philippines will be the major leader supplier of raw dried cottonii seaweed and Kappa Carrageenan worldwide. There is a ready and continuous market for all seaweed produced by marginal fishermen or seaweed farmers whereby providing them a lucrative and sustainable livelihood. Seaweed will be the major dollar earner for the country. More coastal areas are protected from Illegal Fishing.

PERFORMANCE TARGET
Year Production in Metric Tons 168,014.00 Number of Families Total Area In Hectares 76,370.00 Value of Exports In US$

2004

152,740.0

185,699,297.00

2005

227,937.00

207,216.0

103,608.00

251,930,466.00

2006

281,184.OO

309,303.0

154,651.00

310,782,444.00

GOALS
In 2004, to fill the requirement of Philippine Carrageenan Processors and in 2006 to fill the world demand of Dried Eucheuma Cottonii Seaweed. Increase livelihood opportunities among marginal fishermen and exports. Minimize Illegal Fishing Activities.

What field of Activity in Eucheuma/Carrageenan industry affect the Philippines?

In terms of Community Development and environment.

PROCESSING

It generates employment. It opens the market for raw dried seaweed produced by farmers. It can contribute to the Philippine economy by increasing exports. It adds a higher value to seaweed.

TRADING
It generates employment in the country side. It links farmers to the processors and even world market for seaweed. It directly help farmers in term of their domestic needs (either foods or cash advances for healthcare or farming.)

FARMING

Over a million marginal fishermen are engage in seaweed farming with an average annual income of P120,000.00. Opening of new markets increase the shortage of raw supply by as much as 45,000 metric tons annually in 2004 and is an opportunity for 23,000 families of new and unemployed marginal fishermen to engaged in seaweed farming livelihood. Contract farming scheme developed fishermen into an entrepreneur. More coastal areas are protected from illegal fishing. It improves the economic condition of the community.

Intensive Eucheuma Seaweed/Carrageenan Industry Development,

Developed marginal fishermen capacities in facing the challenge of globalization in the field of additives.

ON THE AGAR-AGAR PRODUCING SEAWEED

Present Situation

Gelidium Seaweed
High Commercial value and dried seaweed is exported to

Japan, Korea and even Taiwan. Agar-Agar produced locally is in demand in the local market. Gathered wild, there is no commercial farming technology that invite fishermen to engage into the activity.

Gracilaria Seaweed
Commercial farming technology has been adopted. Lower commercial value that farmers are discouraged to

culture. Agar-Agar content has lower viscosity compared to other countries.

Is there a future for the agar industry?

Gelidium
More research for farming technology that is lucrative to

fishermen in terms of income. The market for dried gelidium seaweed is big. Intensive product applications both in the local and foreign market.

Gracilaria

Culture of gracilaria can be done in Bangus or shrimp ponds. Identify the best specie of gracilaria with higher viscosity. More research on how to blend agar increasing its viscosity. The trend for agar uses is now focused on soft gel than the traditional hard gel produced by South America and other European or Asian Countries.

PROSPECTS OF THE SEAWEED INDUSTRY TO COPE WITH GLOBALIZATION IS ATTAINABLE IF

GOVERNMENT AND PRIVATE SECTOR COOPERATES HONESTLY
(WITHOUT CORRUPTION)

Thank you !!!!!!