Positive outlook for Philippine palm oil industry at National Congress
By MB Business
The recently concluded National Palm Oil Congress in Davao City highlighted an optimistic future for the Philippine palm oil industry. Ares Merchants Philippines Inc. (AMPI), a leading supplier of vegetable oils in the country, observed significant improvements in local palm oil production and anticipated further growth.
AMPI Managing Director Jose Leonardo Tanada noted, “Strong global demand for our locally produced coconut oil in the EU has created a gap in the local vegetable oil market. Palm Olein is the most economical substitute.” He also expressed optimism about the industry’s expansion, citing an annual increase of 2,500-5,000 hectares in oil palm cultivation. “This growth will help address the underutilized capacity of our oil palm manufacturers,” Tanada added.
According to the Department of Agriculture’s (DA) Philippine Palm Oil Industry Roadmap 2024-2033, production is on the rise. The area planted with palm oil has grown from around 53,000 hectares in 2022 to approximately 63,000 hectares in 2023, as reported by the Philippine Statistics Authority. Region XII leads in production with 33 percent of the total area, followed by the Caraga Region with 27 percent.
Tanada emphasized the need for ongoing government support to sustain industry growth until farmers can achieve profitability. “Under optimal conditions, oil palm plantations start producing fruit after 3-4 years and continue for 25 years. The PCA and private entities should provide financial support during this gestation period,” he explained.
Tanada also highlighted the importance of balancing domestic production with palm oil imports. Despite increased local production, the Philippines remains a significant importer relative to its output. “Encouraging local production creates jobs for Filipinos, but imports are crucial to prevent hoarding and mitigate potential inflationary issues for the country,” Tanada said.
Industry experts have identified about one million hectares available for oil palm cultivation, with 98 percent located in Mindanao. Caraga alone holds approximately 40 percent of the total prospective area for palm oil production. The Philippines currently faces a surplus in milling capacity, with current production at only around 180 metric tons per hour compared to the total capacity of 275 metric tons per hour. Industry stakeholders hope that the growing production of oil palm fruits will soon be able to support and fully utilize these facilities.