Pricing Movements of Copra in the Philippines

Philippines is the second largest coconut producer in the world, second only to Indonesia. Over a million farmers are currently dependent on this agricultural commodity and are suffering from depressed commodity price over the past decade. The paper examined the factors that determined the local market prices of copra by testing the theories of substitution, competition and international pressures. Results tend to indicate that “profit” pressures brought about the desire to retain as much economic benefit for the local large-scale exporters of the product is the single most important determinant of the depressed local copra prices. Likewise, data also support the hypothesis that the “substitution” effect of palm oils adversely affected local copra prices.