Coffee Industry
The Philippines was once a reliable source of good quality Robusta from the
late 1970's to the early 1990's (NCDB).The Philippines' consumption from
1993-1995 was 48,000 tons. It has already reached 55,000 MT in 2004.
While instant coffee is still the general preference, the ground and brew
sector is growing. Organic coffee is the other growth area that the industry
can look forward to.
Description
The country has two most popular varieties of coffee: Coffea arabica,
otherwise known as arabica, and Coffea canephora, or robusta.
Based on statistics from the International Coffee Organization, robusta
accounts for 75% of the country's total production and Arabica, 5-
10%.
Other varieties such as excelsa and liberica, also, thrive in the country
and accounts for 15-20% of the country's coffee produce.
Production
World coffee production in 2004 is 6.81 M mt or 113,479,000 60-kg
bags up by 9.75% from 2003 but is still much lower than the
production in 2002 of 7.32 M mt, the highest production in decades.
The top producing countries in 2004 are Brazil (2.3 M mt of Arabica),
Vietnam (0.90 M mt of Robusta), Colombia (0.63 M mt of Arabica) and
Indonesia (0.34 M mt of Robusta)
Based on the data of Nestle the total productive coffee area in the
country is about 72,620 hectares with 49,200 hectares in Mindanao.
The average yield is only 0.39 mt/ha but the potential is 2-3 mt/ha
given the right management.
It is estimated that around 300,000 Filipinos depend on the coffee
industry.
Estimated Production, 2003-2004
ESTIMATED AVERAGE YIELD ESTIMATED
TOTAL
Cluster
GC PRODUCED
AREA (ha.) (MT) (MT)
(MT)
Philippines 72,620 0.39 28,307 26,504
North Luzon 5,000 0.29 1,425 3,876
South Luzon 10,020 0.70 6,981 5,933
Visayas 8,400 0.29 2,401 1,820
Mindanao 49,200 0.36 17,500 14,875
Processing
Aside from the instant coffee players such as Nestle, URC and San
Miguel there are other players in the market such as Kopiko and Kape
Filipino,
In the ‘Ground and Brew' the signi. cant players in the local market are
Figaro, Monk's Blend, Café Amadeo, Batangas Brew
Available also in wet markets are roasted beans of robusta and liberica
for grinding
Cost and Return
In Cavite total cost of production is P27,461.50/ha if with fertilization
on a yield of 1000 kg/ha and P15,000.00/ha if without fertilization on a
yield of 400 kg/ha green bean
In Sultan Kudarat the cost of production for Robusta is around P27/kg
as monocrop and P23/kg with intercrops.
Net income is P20-30,000/ha at P43/kg green bean
Demand and Supply Projections
Domestic demand stands at 55,000 MT
Domestic production is around 27,000 MT in 2004
The shortfall of 30,000 MT is imported at a total of US$ 25 M/yr
Local demand is growing at 3%/year to about 65,693 tons by 2010
and 78,439 tons by 2015
The country will be importing 46, 000 tons by 2010 at the present rate
In terms of expansion area for coffee Mindanao has enough area to
answer for about 70% of the projected 10,000-hectare per year
expansion needed to be self suf. cient
There is also an increasing local demand for organically grown coffee
and other specialty coffee such as Phil. Barako Coffee, Halal Coffe,
Phil. Excelsa Coffee and Kape Alamid
Local Market
Nestle has about 80% of the market
Foreign Market/Trade
Top exporting countries in 2004 are Brazil (1.58 M mt), Vietnam (0.89
M mt), Colombia (0.61 M mt) and Indonesia (0.27 M mt)
The Philippines exported $4.51 M worth of coffee products. Liberica
and Excelsa accounted for $0.14 M
In 2004 the Philippines imported 15,087 mt of raw green beans,
roasted beans and extracts worth USD 25.49 M
Robusta green bean import in 2004 was 8,196.4 mt at $ 7.63 M or
$0.93/kg
Arabica green bean import in 2004 was 81.34 mt at $1.144/kg
Marketing Practices
Farmers generally dry their coffee beans and have them milled
through local millers.
Green beans are sold to traders or directly to the buying stations of
Nestle or to wet markets
Problems
low production,
low income of coffee farmers,
poor quality of coffee beans,
lack of postharvest facilities for quality processing,
highly . uctuating market prices
Price Trend
Prices of Robusta is highly volatile- P43/kg in March 2005 and P70/kg
in July 2005
Arabica is higher at up to P110/kg
Credit Assistance
Quedancor- Self-reliant Team (SRT), P28,000/ha for rehabilitation
maximum of P50,000/farmer
Land Bank of the Philippines- P45,000/ha for rejuvenation, P60/ha for
new plantings
Investment Opportunities
Credit facilities for rehabilitation- P300 M
Nurseries for seedlings of Robusta, Arabica and Liberica
Coffee plantations for robusta, Arabica and liberica
Post harvest facilities
Processing for the ground and brew
Institutional Support
A priority commodity under HVCC
National Coffee Development Board
Cavite State University
Benguet State University
