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THE COFFEE INDUSTRY CLUSTER

By: Myrna P. Pablo


DTI- National IC Coordinator
for Coffee
Regional Director, DTI-CAR
Mallberry Suites, CDO
October 13, 2016

1. INDUSTRY PROFILE
2. PHILIPPINE COFFEE ROAD
MAP
3. WAY FORWARD

Y
R
T
S
U
D
IN
E
L
I
F
O
R
P

PHILIPPIN
ES (ICO-1260-kg bag of dried berries

WORLD
UNIT:

Productio
n

2015)

143.4 M 200,000

(ICO-12-2015)

95%

Consumpti
on

150.2 M

(ICO-12-2015)

Net (Deficit)

7%

2,900,000
(6.8 M) (2,700,00
0)
-5%%

Region

# of
Prov.

CAR
NCR
R1
R2
R3
RegionsR4A
R6

6
1
2
2
3
3
3

R10

R11

R12

CARAGA

16
42
Provinces

NIR
R7
R8
R9
ARMM

2
2
2
1
1

List of Provinces
Abra, Apayao, Benguet, Ifugao, Kalinga,
Mountain Province
Metro Manila
Ilocos Sur, Ilocos Norte
Quirino, Nueva Vizcaya
Aurora, Bataan, Bulacan
Cavite, Batangas, Quezon
Iloilo, Capiz and Antique
Bukidnon, Lanao del Norte, Misamis
Oriental
Dava del Norte, Davao del Sur, Davao
Oriental, Cotabato City
Sultan Kudarat, North Cotabato,
Saranggani, South Cotabato
Surigao del Sur, Agusan del Norte, Agusan
del Sur
Negros Occidental & Negros Oriental
Bohol and Cebu
Leyte and Southern Leyte
Zamboanga
Sulu

Other Info:
Production volume is decreasing by 2.87%
per year
production yield is decreasing 2.23%/year.
Production area is decreasing by 1%/year for
the last 9 years and increased by just 1% from
2013 to 2014.
Decline in production area is due to shift to
other more profitable crops & urbanization.
Low yield is due to old age of trees, limited
rejuvenation, poor farm practices and poor

Production
In (PSA 2015)

PHILIPPIN
ES

23,280

Metric Tons

of

Green Coffee Beans (GCB)

Average
Price/
(PSA 2015)

Total Value of
Coffee

PhP 83.19/

kg-

GCB

PhP 1.9367

more info

(PSA/ Regional

Profiles)

Total Number of Farmers


: 79,958
Average Farm Size per farmer : 1-2
hectares
Total Number of Bearing Trees
:
67.7 M trees
Number of New Trees
: 3.7 M new
trees

Total Area Planted (ha)


84,580.37 ha

PHILIPPINE COFFEE PRODUCTION by TYPE: (PSA,


2014) Area
vol in mt
%
Ave
TYPE

Dried
berries

share

Arabica 15,871. 24
24
%
Robust 43,955. 69
4
a
%
346
Liberic
1%
a
Excelsa 3,170.9 6%

planted
(ha)

Yield
mt/
ha

Top 3 Regions

16,612.9 .93
7

R12, R11,
R6

76,294.7 .59
5

R12, R11,
R10

590.15

R6, R4A,
R11

6,643,92

R11, R12, R

COFFEE PRICES by TYPE per kg of Green Coffee


Beans (GCB)

Robusta prices follow fluctuating prices set at London


Exchange when sold for soluble market
Robusta is also being prepared for the specialty market
which now termed as FINE ROBUSTA and could be sold
doubled in price or even at negotiated prices
Arabica and Liberica is totally for the Specialty
market. Liberica is known for its strong kick
Arabica prices are negotiable depending on coffee
profile, origin and value adding
PSA. 2014 data of farm gate
prices
Excelsa is still mixed with robusta. There is not much
distinct mentions on this variety

INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Green
Coffee
Beans

Roasted
Coffee

VALUE LADDER

Brewed
Coffee

COFFEE VALUE CHAIN : PROFIT


900,000
MARGINS
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0

15,000

28,000

48,000

Source: Philippine Coffee Alliance

120,000

800,000

Assumptions:
1 hectare
1,000 trees
500kgs GCB
375 Kg. of roasted
coffee
100 cups brewed
coffee/ kilo of
roasted coffee
P40 / cup

Cost Ladder from Farming to Processing

Source: Department of Agriculture

350.00

300.00

300.00
250.00
200.00

183.33

150.00
100.00
50.00
-

36.92

33.48

1.00

7.60

PPC - primary processing


cost (farm level)
SPC - secondary processing cost (to
roast and ground coffee)
R&G roasted & ground coffee

1.00

30.00

6.67

The situation improved largely since 2012 specially on


Arabica where primary cost per kg. of green beans
improved from P150 to P300/kg and roasted coffee is
600-750/kg.
13

Requirements for
Development:
INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

Micro Financing for farm


inputs
Improvement of
Agricultural practices
Technical assistance on
the implementation of
GAP and coffee
standards
Technical assistance on
establishing seed banks
of certified Seeds

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Green
Coffee
Beans

Provision of appropriate facilities (pulper,


dryer, washer, sorting tables and huller and
moisture meter;
Massive Technical Trainings of farmers
Organizational training on operation of
community facility
Investment Promotion
Financing
Database Development and regular updating
and dissemination of knowledge products
Market Promotion

Roasted
Coffee

Brewed
Coffee

Investment Promotion of
coffee businesses
Establishment of cupping
laboratory
Regular cuppings session on
coffee samples from all
origins
Technical courses on coffee
processing (Roasting,
grinding, brewing

INVESTMENT AREAS:
INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

Private
Nursery
Government
Nursery
Community
Nursery
Certified Seed
Bank
Coffee
Farm
Coffee Demo
Farm
Learning Site/
Coffee Tour
Farm

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Coffee
consolidator
Coffee equipment
fabricator
Coffee drying/
hulling plant
Coffee
Processing plant

Green
Coffee
Beans

Roasted
Coffee

Coffee
Roaster
Coffee
Shops
Coffee Supply
Store
Coffee
Academy
Coffee Q-Grading and
Cupping Laboratory
Beverage
Store
Pasalubong
Center

Brewed
Coffee

WHY COFFEE?
INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Green
Coffee
Beans

Roasted
Coffee

Brewed
Coffee

1. Coffee industry has high inclusive growth. It is labor intensive in farm development and operation,
processing and marketing.
2. The Philippine is largely a coffee consumer. Big number of coffee shops requiring a large number of
skilled labor, have emerged. This assures market of coffee in the Philippines.
3. There is a preference of Philippine coffee due to organic properties compared to Vietnam and
Indonesia Coffee plantations provide an annual big time income while allowing intercrop of short term
cash crops.
4. There is a strong provision for government support;
5. Coffee promotes peace;

THE COFFEE ROAD

VISIO
N

cost-competitive,
aligned with global
quality
standards,
reliable and
environmentfriendly;
provides sustainable
benefits to farmers,
processors, traders
and exporters

THE COFFEE ROAD

GOALS

Increase productivity and


production leading to selfsufficiency by 2020
Improve farmers standard
of living through diversified
high value agriculture
Increase rural employment
Adaption of environmentfriendly technologies
Lessen coffee bean and
coffee products importation
Improve incomes of
farmers, processors and
other stakeholders

THE COFFEE ROAD

OTHER PRIORITY
CONCERNS
Establish
an
institutional

e
g
n
e
l
l
a
h
C
s

platform
among
stakeholders at the national,
regional and provincial level.
(NTWG)
Investment promotion from
soil to cup
Sources of
Investments/Funds
Compliance of Quality
Standards across the Value
Chaim
Establishment / regular
updating of coffee database

THE COFFEE ROAD

FOCUS OF COFFEE ROADMAP:


INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Green
Coffee
Beans

Roasted
Coffee

Brewed
Coffee

1. Improvement of coffee farmers productivity,


profitability and product quality
2. Increasing production area
3. Market access and value-addition in coffee
products
Coffee Industry Strategic Plan

Market Access and Value Addition in Coffee


Products

Investment promotion from seed to cup


Development of new products and processing
technology
Provision of appropriate processing equipment
Market Niching for Philippine coffee: Branding,
Quality seal, single origins, organic, specialty, etc.
Capability building on Q (Arabica) and R (Robusta)
grading and cupping
Promotion of specialty coffee
Improvement of packaging and labeling
Institution building (coffee councils, TWG from
National to Provincial levels)
Coffee Industry Strategic Plan

QUALITY standards:

PNS/PAES 252 (2011) (English): Agricultural machinery


- Coffee Pulper Specifications
PNS/BAFPS 01:2012/ ICS 67.140.20: Green Coffee
Beans Specifications
PNS/BAFS 169:2015/ ICS 67.080.20 Code of Good
Agricultural Practices for Coffee
PNS/BAFS 170:2015/ ICS 67.080.20 Code of Practice
for the Prevention and Reduction of Ochratoxin A
Contamination in Coffee

Coffee Industry Strategic Plan

Q- GRADING AND VALUE ADDING:

SPECIALTY COFFEE STANDARDS- Specialty Coffee


Association of America (SCAA)/ Europe (SCAE)
Common Code of Coffee Communities 4C
Association
Thematic Value Adding Certifications

Women in Development
Bird Sanctuary
Bio Diversity (WWW Fund for Nature)
Rainforest (Rainforest Alliance)
UTZ
Organic

Fair Trade
Green Industry
Coffee Industry Strategic Plan

Coffee Industry Strategic Plan

Coffee Industry Strategic Plan

STRATEGIC OBJECTIVES
INPUT-PRODUCTION

Inputs/
seedlings

Coffee
berries

PROCESSING

PRE-PROCESSING

Dried
Coffee
berries

Parchment

Green
Coffee
Beans

Roasted
Coffee

1. Productivit 2. Quality 3.
Improvem Product
y&
ent
Efficiency
and
Enhanceme
Market
6. Developm
Access
nt 5. Creation of
Enabling Business to ent
Environment
Finance

Brewed
Coffee

4.
Investmen
t
Promotion

cy

MOVING FORWARD
1

S EM

2nd Philippine Coffee


Conference . Nov. 23-25,
2016. Hotel Supreme
Baguio City

CREATION OF THE
NTWG for COFFEE

R
E
T
ES

PUSH FOR BEST


QUALITY OF
PHILIPPINE COFFEE

PROMOTE
PROCESSING
ROBUSTA FOR THE
SPECIALTY COFFEE
MARKET

DEVELOPMENT OF A
A PHILIPPINE
COFFEE BRANDING