Banana chip sector wants coco oil price rolled back

Banana chip producers and exporters on Wednesday said importing countries will lose interest in the product if government does not lower the price of coconut oil, which ramps up production costs. “As per pricing, we remain competitive. But we cannot go on like this. Eventually, buyers will find cheaper substitutes to banana chips," Ruben See, president of the Manufacturers and Exporters of Banana Chips Association of the Philippines, told reporters in an interview. After coconut oil breached $2,000 per metric ton, the commodity now accounts for 60 percent of the costs of making banana chips, according to the association. Philippine traders ship banana chips mostly to the United States, China, and a number of European countries. They are now in the process of expanding to Iran and other Middle East countries. The Philippines used to ship around 30 percent of Mindanao’s Cavendish bananas to Iran until the US and the United Nations Security Council imposed economic sanctions halting shipments to the predominantly Muslim country. The Philippine banana chip industry expects exports to increase by 10 percent to 44,000 metric tons (MT) this year, from 40,000 MT, valued at $40 million in 2010. The country exported 36,000 MT in 2009. Total production last year was 60,000 MT, from 55,000 MT in 2009 levels. See, owner of See’s International Manufacturing Corp., said Mindanao will remain as the country’s production hub for banana chips. Cheap raw materials make Mindanao an attractive site for banana chip operations than Luzon where the average cost per unit or piece of banana is P2.50, compared to P1 in Mindanao. — With Paterno Esmaquel II/VS, GMA News