Philippines says pests damaged 400,000 coconut trees last week, exports affected

MANILA (REUTERS) - The Philippines said an insect infestation had damaged another 400,000 coconut trees over the past week and could spread to the key growing areas by the end of this year, severely crippling the country's most valuable agricultural export.

The fast-spreading infestation at the world's top coconut oil exporter at a time when global demand is seen outstripping production from Asia, home to 85 percent of output, could further boost prices of the commodity in the world market.

"The rate of infestation is very high," Secretary Francis Pangilinan, who is in charge of the country's food security, said on Monday while announcing a 24 percent jump in the number of trees affected in the past week to 2.1 million.

"If we don't intervene, by the end of the year, Regions 5 and 9 would be affected too," he said, referring to two key growing areas that account for about a fifth of the national output.

"It's a race against time."

Coconut oil prices in Rotterdam have jumped 13 percent this year to a high above US$1,420 (S$1,775) per tonne in June, as damage to trees from pests tightened supplies that have already been hit by last year's typhoon in the Philippines.

While the 2.1 million affected trees represent less than 1 percent of the country's more than 300 million coconut trees, Pangilinan said the entire Philippine coconut industry could get wiped out in just a matter of months if emergency measures to combat the infestation fail.

The country has already taken emergency measures to head off the coconut scale infestation, such as pruning of leaves and spraying of pesticides. The insect feeds on the leaves of the coconut tree, sucking nutrients until the leaves turn yellow, then die and fall off.

A thousand insects can multiply to about 200,000 in just 45 days, said Romulo Arancon, administrator of the state agency Philippine Coconut Authority (PCA).

There is no official estimate yet on the loss of output from the infestation, but Pangilinan, also chairman of the PCA board, has said the damage could result in losses of more than 33 billion pesos (S$942 million) in a year if it spreads to major coconut-growing provinces such as the Bicol region and the Zamboanga Peninsula.

The country's annual exports of coconut products averaged US$1.3 billion in the past two years.

Overseas sales of coconut oil, used in products from food to fuel, have dwindled this year after Super Typhoon Haiyan damaged about 34 million trees late last year. Preliminary industry data showed January to May coconut oil shipments plunged 49 percent from a year ago to 302,297 tonnes.

The industry group United Coconut Associations of the Philippines, which for now has retained its estimate for a 24.5 percent drop in exports this year to 850,000 tonnes, has said the insect infestation could further hurt output.