COPRA FOR ANIMAL FEEDS VERSUS COOKING OIL

COPRA FOR ANIMAL FEEDS VERSUS COOKING OIL

His Excellency Ferdinand E. Marcos, Jr.
President of the Republic of the Philippines
Malacañang Palace
Manila

Subject: Comparative Analysis: Copra Meal for Animal Feeds vs. Coconut Cooking Oil and Virgin Coconut Oil (VCO)

Dear Mr. President,

It was recently announced that the Department of Agriculture (DA) is promoting the use of cattle feed that is using copra meal as one of its main ingredients. Apparently, the idea to use copra came about after there was a shortage of soybeans in the world market, a development that has resulted in higher soybean prices. While I believe that that might be a good stop gap measure, it may not be a good strategy in the long run because of many reasons.

Producing copra from fresh coconuts has never been a good idea, because by drying the fresh coconut meat, there is already value lost, because precious oil il lost in the drying process. Besides, as the dried copra is stored and transported, it is susceptible to being attacked by insects and vermin. There is also an additional risk about copra being infected by salmonella, which is a danger to both animal health and human health. Recent studies and market experiences have also shown that VCO could even be a better product than coconut cooking oil.

The coconut industry offers various opportunities for value addition, but the choice between producing copra meal for animal feeds and producing coconut cooking oil or VCO significantly impacts profitability, value-added potential, and market positioning. Below is a comparative analysis based on profitability, value addition, and other considerations:

1. Producing Copra Meal for Animal Feeds

Production Process:

  • Copra meal is a byproduct of extracting coconut oil from dried coconut meat.
  • The process involves drying coconut meat, extracting oil, and milling the remaining residue into copra meal.

Market and Profitability:

  • Target Market: Primarily the livestock and aquaculture feed industries.
  • Profitability: Low to moderate. Copra meal is a bulk commodity with relatively low profit margins due to its low unit price.
  • Production Cost: Lower compared to oil production as it involves fewer processing steps.
  • Market Stability: Moderate demand, but it competes with other animal feed options like soybean meal.

Value Added:

  • Value Added: Low. Copra meal is a byproduct and often considered a secondary product in the value chain.
  • Price Range: Typically, lower than coconut oil or VCO. Prices fluctuate based on the demand for animal feed and global commodity markets.

Sustainability and Byproducts:

  • Minimal waste as copra meal is itself a byproduct.
  • Environmentally sustainable if production adheres to ethical sourcing and energy-efficient drying methods.

2. Producing Coconut Cooking Oil

Production Process:

  • Requires copra processing and oil extraction through expelling or solvent extraction.
  • Refining is often needed to produce cooking-grade oil (Refined, Bleached, and Deodorized Coconut Oil, or RBD).

Market and Profitability:

  • Target Market: Domestic and international food industries.
  • Profitability: Moderate. Cooking oil has higher unit prices than copra meal, but costs are also higher due to refining.
  • Production Cost: Moderate to high due to equipment, energy, and labor requirements.
  • Market Stability: High demand as a staple cooking ingredient worldwide.

Value Added:

  • Value Added: Moderate. The oil is a refined product with a broader market reach and more applications than copra meal.
  • Price Range: Higher than copra meal but lower than VCO.

Sustainability and Byproducts:

  • Byproducts like copra meal and coconut husks can be used or sold, reducing waste.

3. Producing VCO

Production Process:

  • Extracted from fresh coconut meat through mechanical or natural means (cold pressing, fermentation, or centrifuge).
  • Does not require refining, bleaching, or deodorizing, preserving natural nutrients.

Market and Profitability:

  • Target Market: Health-conscious consumers, beauty and cosmetics industries, and niche export markets.
  • Profitability: High. VCO commands premium pricing due to its perceived health benefits and versatility.
  • Production Cost: High. Requires fresh coconuts, specialized equipment, and labor-intensive processing.
  • Market Stability: Growing demand, particularly in health and wellness markets.

Value Added:

  • Value Added: Very high. VCO is considered a high-end product, with significant markup potential.
  • Price Range: Substantially higher than both copra meal and cooking oil.

Sustainability and Byproducts:

  • Residue from VCO production can be used as a secondary product (e.g., coconut flour or feed).
  • Lower environmental impact if using eco-friendly processing methods.

Comparison: Profitability and Value Addition

Factor

Copra Meal

Coconut Cooking Oil

Virgin Coconut Oil (VCO)

Profitability

Low to Moderate

Moderate

High

Value Added

Low

Moderate

Very High

Market Price

Low ($150–$200/ton)

Moderate ($1,000/ton)

High ($2,000–$3,000/ton)

Processing Cost

Low

Moderate

High

Market Stability

Moderate

High

High

Demand Trends

Stable

Stable to Growing

Rapidly Growing

Conclusion

1.   Profitability: Producing VCO is the most profitable option due to its high market price and premium consumer demand, especially in export markets. Copra meal is the least profitable, serving as a low-margin commodity.

2.   Value Added: VCO also offers the highest value addition, making it ideal for niche markets focused on health, beauty, and wellness. Coconut cooking oil provides moderate value addition, while copra meal is considered a byproduct with limited added value.

3.   Recommendation: For long-term profitability and sustainability, focusing on VCO production is advisable. However, if capital and market access are limited, producing coconut cooking oil may serve as a practical intermediate step. Copra meal production should only be pursued as part of an integrated approach to minimize waste and maximize resource utilization.

4.   Implementation: Create an inter-agency Technical Working Group (TWG) to study the transition from producing copra meal to producing VCO. However, the TWG could also study how to produce animal feeds from the process of VCO production. TWG members could be DA, DTI and DOST.

Respectfully yours,

Ramon Ike V. Seneres
iseneres@yahoo.com, 09088877282, senseneres.blogspot.com

Cc: Hon. Secretary of Agriculture

Hon. Secretary of Trade & Industry

Hon. Secretary of Science & Technology

01-13-2025

 

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