The ASEAN Secretariat, the custodian of the Regional Comprehensive Economic Partnership Agreement (RCEP), has issued a notification that the Philippines has formally deposited its instrument of approval with the ASEAN Secretary General. According to the provisions of the agreement, RCEP will enter into force for the Philippines on June 2, 2023. In order to strictly fulfill the commitments of the agreement and actively promote the full entry into force of RCEP, the Tariff Commission of the State Council issued a notice to implement the agreed tariff rates applied by the ASEAN member countries of RCEP for some imported goods originating from the Philippines from June 2, 2023, with subsequent annual tariff rates to be implemented from January 1 of the same year. The agreement enters a new phase of full implementation with the mutual implementation of tariff concessions.


The Philippines' ratification of the RCEP came into force, making the domestic coconut market and coconut product lovers rejoice. In recent years, the domestic consumption of coconut represented by coconut drinks has been rising year by year. Promoted by tea beverage brands such as Xi Cha and Rui Xing, coconut drinks wear the laurels of health and trend in the beverage industry and are driving the coconut market scale up year by year. Data show that the size of China's coconut market reached 5.428 billion yuan in 2022.

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According to the "2023-2029 China Coconut Industry Development Status Analysis and Prospect Strategy Analysis Report" released by Wisdom Research Consulting, China's coconut industry is mainly distributed in Hainan, Yunnan, Guangdong, Guangxi, Fujian, Taiwan and other provinces and regions, of which Hainan Province covers about 99% of the country's planting area and is the only region in China where commercial coconut cultivation is carried out. Domestic coconut production is limited, making it difficult to meet the needs of the growing food market for coconuts. Moreover, the development of China's coconut plantation industry and processing industry is not coordinated, the supply gap of raw materials is large, the product structure of coconut industry is single, low value-added, and homogenization is serious, which has caused a major obstacle to the development of coconut industry. At present, China's coconut raw materials mainly rely on imports, coconut trees, spring light, Southland and other enterprises of coconut raw materials mostly from imports. Some foreign coconut export enterprises in order to support the development of their own coconut industry, to limit exports, no doubt to our market has a greater impact.


For a long time, due to various reasons, China's green coconut and coconut products imported destination countries are mainly Indonesia, Malaysia, and Vietnam. In 2019, the Philippine green coconut was approved for export to China, and its green coconut and coconut water, coconut milk, coconut oil and coconut sugar, among other products, were able to enter the Chinese market. 2020, the Philippines has become the second largest coconut supplier to China. It exports about 43,000 tons of coconut products to China annually, accounting for 27% of China's coconut market share.


Since the entry of Philippine coconuts into China, the industry has greatly accelerated in the Philippines, with an average annual growth of more than double digits, even growing nearly 60% in the last year, with annual industry revenues of nearly $2 billion.


In an interview with China Trade News, Qu Qiang, a researcher at the Beijing Institute of International Business and Economics, said that with the landing of the relevant trade agreements, the China-oriented Philippine coconut industry will gain more rapid development, benefiting local farmers and enterprises. "It can be said that joining the RCEP has laid the foundation for the Philippine agricultural industry, represented by the coconut industry, to take off in the Chinese market. The coconut industry is just one of the many highlights of cooperation under the framework of the RCEP, which will help the Philippine community realize that joining the regional trade family and participating in the 'Belt and Road' cooperation can bring good benefits to the country, and also give a good example to more Chinese and Philippine economic and trade partners to open the international doors in the future. "

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In the Sino-Philippine agricultural economic and trade cooperation, some related risks should not be ignored. Qu Qiang particularly prompted to, from the macro point of view, the global economic downturn, international political and economic and trade friction, the rise of trade protectionism, all to the regional economic and trade has brought great uncertainty. Coconut industry is a long-cycle agricultural industry, coconut trees planted after seven or eight years before fruiting. During the seven or eight years, it may experience many uncertainties such as natural disasters, economic cycle fluctuations and many other uncertainties. Once prices fluctuate and farmers or traders suffer economic losses, economic issues are often magnified into international relations issues. This requires companies to use government policies, international laws, financial insurance and other tools to iron out the cycle and prevent risks. It is also important to prevent third countries outside the region from disrupting normal economic and trade cooperation between the two countries for political purposes.


At the micro level, the industrialization of coconut in the Philippines still needs to be improved. The small farmer economy coexists with the industrial economy, the market is not well integrated, the channels are not perfect, and currently it mainly relies on large local exporters to import in bulk. According to Qu Qiang, as the cooperation between China and the Philippines deepens in the future, it is also an inevitable trend for Chinese enterprises to directly dock with local producers and customize production. But in quality control, pricing, acquisition, transportation, as well as exchange rates and futures hedging, laws and regulations, folk customs, social security and other aspects need to be explored for a long time to learn and adjust to adapt.