With its hot weather, abundant rainfall, fertile soil and substantial tracts of arable land, the Philippines is a prime agricultural area for growing a variety of tropical fruits. While already a major global producer of banana, pineapple and mango, the country is looking to boost its exports of these crops still further.

Attention is now being given to their export potential to markets such as the US and Europe, where health-conscious consumers are showing increased interest in products made from these crops. Meanwhile, these fruits already comprise the country’s top agricultural exports in terms of volume and value.

In addition, the coconut crop has been identified as an extremely profitable product. A number of plans are in place to use its many by-products, from milk to oil and sweeteners, as new items for export.

A TOP PRODUCER: The Philippines is aiming to supply a larger portion of what is now a $4bn global market for fresh and processed tropical fruits. The UN Food and Agriculture Organisation (FAO) forecasts that by 2014, global imports of fresh and processed tropical fruit products could reach 3.6m tonnes. Some 81% of this amount – 2.6m tonnes – will go to developed markets, such as the US and European countries, which together account for 70% of this demand.

The potential for profit is already evident. From 2006 to 2010, overseas demand for Philippine fruit purees and juices showed an average annual growth rate of 5.62%, according to the country’s Board of Investments (BOI). Indeed, tropical fruits are among the country’s top exports to the EU, raising an average of P4.8bn ($108.96m) in annual revenue over the period.

Meanwhile, according to FAO statistics, the Philippines was the top producer of pineapple in the world in 2010, and the second-largest producer of coconuts and bananas. It was also the ninth in terms of global mango exports. Philippine mangoes are considered to be among the world’s finest and are the third-most important fruit export for the country based on export volume and value, following banana and pineapple.

FAO data also ranked the Philippines as the world’s second-largest coconut producer in 2009, after Indonesia, with production hitting 15.67m metric tonnes that year. According to the Department of Agriculture (DA), coconut trees accounted for 26% of total agricultural land, or 3.56m ha, in 2010. The country had 341.3m bearing coconut trees, with an average of 46 nuts per tree per year, in 2009. Coconut production dropped slightly in 2010, from 15.7bn to 15.54bn nuts per year.

INCREASING GLOBAL DEMAND: In 2011, coconut export receipts totalled $1.78bn, according to the National Statistics Office (NSO). NSO data showed coconut products’ total 2011 receipts exceeded 2010 earnings by more than 18%, with coconut oil bringing in $1.43bn, desiccated coconut $286.76m and other coconut products $12.87m, in 2011.

The Philippines is the world’s biggest coconut oil exporter, shipping 80% of its production to foreign buyers. Of the country’s top 10 exports in 2010, coconut oil ranked third, posting the highest growth among the top 10 at 112.9%, reaching $1.266bn in 2010, according to the NSO. The country expects to export 925,000m tonnes of coconut oil in 2012, according to the United Coconut Association of the Philippines (UCAP).

The Philippines supplies 75% of all EU coconut oil imports, worth more than $614m in 2010. Indeed, Europe and the US import most of the country’s coconut oil, with Korea and China emerging as major markets.

In 2010 the country also exported 2.36m tonnes of copra, the dried coconut kernels from which coconut oil is obtained, up from 1.52m tonnes in 2009, according to data published by UCAP.

OTHER FRUITS: Data from the BOI shows that the country’s top fresh pineapple export destinations for 2010 were Japan (200,561 tonnes), South Korea (40,098 tonnes) and Singapore (12,865 tonnes), with annual growth in world demand remaining high in recent years, at around 3% per year.

The Philippines is also among the world’s top 10 mango-exporting countries, with a global share of 3.6% in 2010. To increase the country’s mango exports, the DA is planning to open up new markets in Europe and North America to take advantage of the projected increase in global demand.

Hong Kong and Japan are currently the main destinations for Philippine fresh mangoes, together taking 86% of exports. Other existing markets are the US, Singapore, Germany, Malaysia, New Zealand and Canada. South Korea, the Netherlands and the Middle East are counted among emerging markets for the fruit.

A TREE OF MANY USES: A concentration on producing coconuts, however, aims to take advantage of the range of uses the coconut tree can fulfil: providing food products such as coconut milk, coconut meat and cooking oil; geotextiles; wood for scaffolding; and activated carbon for water filtering.

In addition, coconut water has become a global health phenomenon given its rich vitamin and mineral content. Indeed, exports of Filipino coconut water increased more than three-fold in the first half of 2011, driven by strong demand on the world market, according to the Philippine Coconut Authority (PCA). PCA figures show exports of this product increased by 315% during the January to June 2011 period, reaching 7.5m litres. The PCA’s data show the US accounted for the highest growth in purchases in 2011. The US market bought 6.19m litres in 2011, up from 1.27m litres in 2010, a 387% rise. Exports to Europe grew to 213,220 litres, from 72,280 litres in 2010.

In another novel use for coconut tree products, the DA announced in February 2012 its intent to promote the export of coconut sap sugar. This would help the country enter the global alternative sweetener market.

TRADE: The Philippines has a number of free trade agreements (FTAs), and increasing FTA utilisation is also among the core strategies identified in the Philippine Export Development Plan. In 2010, the country was rated as one of the top countries in ASEAN to use such FTAs, according to data from the Asian Development Bank. FTA utilisation rate rose to 41.15% in 2010, a marked increase from the 20% utilisation rate in 2008, according to a 2008 survey by the bank.

A number of tropical fruit exporters have thus been expanding their business by taking advantage of these agreements. One example is KLT Fruits, a manufacturer of tropical fruit purees, which is tapping farmers and farmers’ cooperatives to meet increased orders for tropical fruit purees from FTA markets such as China, Korea, Australia, Japan, and New Zealand, where such exports enjoy reduced or no tariffs.

GOVERNMENT AND INDUSTRY SUPPORT: The BOI expects agriculture-related investments to help diversify exports in line with the Philippine Export Development Plan for 2011-12, which provides strategies for improving export growth in the country. Indeed, agriculture investment projects were among the top initiatives approved by the BOI last year. Total approved investments amounted to P1.92bn ($435.8m) in 2011.

A wide range of investment promotion regulations and policies are in place that should provide a boost for the tropical fruit subsector. These include the Medium-Term Philippine Development Plan, the Philippine Export Development Plan and the Agriculture and Fisheries Modernisation Act. A number of industrial organisations have also given their support. Among them are the Philippine Banana Growers and Exporters Association, the Philippine Coconut Authority, the Philippine Mango Growers Association, the Northern Mindanao Pineapple Industry Association and the Philippine Exporters Confederation, all of which have given their backing for a major increase in business in 2012.