Coconut-based industries need to diversify

JAKARTA (JP): Indonesia, currently the world's second largest supplier of coconut oil and copra meal, could expand its coconut- based industries even further, an analyst says.

P.G. Punchihewa, the executive director of the Asian and Pacific Coconut Community (APCC), said that Indonesia has the potential to expand and diversify its coconut-based industries given that its 3.69 million hectares of coconut-grown areas produced only US$294.5 million in revenues in 1994, contributing 0.74 percent to the country's total export revenues that year.

This is much lower than the Philippines, which, in the same year, used 3.09 million hectares of land grown with coconuts to generate $719.64 million in revenues from coconut-based industries.

According to APCC statistics, Indonesian exports of coconut oil in 1994 reached 392,872 tons, second after the Philippines, which exported 852,300 tons.

Meanwhile, Indonesia's exports of copra meal that year reached 367,359 tons, ranking second after the Philippines, which recorded 568,723 tons.

"APCC's 13 member countries currently produce almost 90 percent of the world's production of coconuts which reached 51,281,450 nuts in 1994," Punchihewa said.

APCC's member countries are Fiji, India, Indonesia, Malaysia, Micronesia, Papua New Guinea, the Philippines, the Solomon Islands, Sri Lanka, Thailand, Vanuatu, Vietnam and Western Samoa.

Punchihewa said that Indonesia can expand its coconut-based industries as the fruit can be made into both edible and inedible products.

Indonesia's production of coconut in copra equivalent, according to the APCC, fluctuated only slightly in the 1990-1994 period. In 1990, for example, Indonesia's production of 2.33 million tons of copra equivalent increased by 6.29 percent to 2.47 million tons in 1991.

In 1992, production went down by 0.12 percent and increased again by 5.27 percent in 1993. In 1994, coconut production reached 2.63 million tons of copra equivalent, or up by 0.98 percent from the previous year.

About 40 percent of Indonesia's production of coconut is used to make edible products such as fresh coconut for consumption and oil, including the traditionally-manufactured cooking oil locally known as minyak klentik.

The remaining 60 percent is used for such industrial purposes as copra (59 percent) -- a kind of dried coconut meat used for making coconut oil -- and for desiccated coconut (one percent).

Diversification

About 80 percent of the copra produced is used for domestic consumption and the remaining 20 percent for exports. Meanwhile, 40 percent of the desiccated coconut is used for domestic consumption and 60 percent for exports.

Punchihewa pointed out that with only 565 coconut oil factories in 1992 producing an annual rate of 1,095,978 tons, Indonesia can diversify its products and increase its production.

According to official statistics, Indonesia's consumption level for coconuts in copra equivalent fluctuated over the 1990- 1994 period.

Consumption in 1990, when Indonesia had a population of 179.38 million people, reached 1.9 million tons of copra equivalent, and went up by 2.2 percent to 1.94 million tons in 1991.

In 1992, consumption dropped 8.28 percent before going up by 21 percent in 1993. In 1994, when the country's population reached 192.22 million, the consumption level went down 10.82 percent to 1.92 million tons of copra equivalent.

The provinces which contribute the most coconuts in Indonesia are Riau (12.43 percent) and North Sulawesi (11.03 percent). The island of Sumatra produces 32.82 percent of Indonesia's total production, Java 23.64 percent and Sulawesi 23.62 percent.

Punchihewa said that unlike palm oil trees, which are grown by large estates, coconuts are grown by individual farmers without rigid management programs.

"Usually coconuts are grown on areas or plantations covering less than one hectare," he said.

This -- and the fact that coconut oil has to compete with other types of vegetable oils such as palm, soya, granola and sunflower -- has caused coconut-based industries in Indonesia to grow at a slow pace.

"Indonesia can try to diversify its coconut-based products to rugs, carpets, yarn and mats, as has been done in India," he said. (pwn)