INTEGRATED APPROACH IN THE PROCESSING OF COCONUT PRODUCTS /BY-PRODUCTS AND MARKET PROSPECTS IN THAILAND

Somchai Watanayothin and Peyanoot Naka*

Abstract

Problems in the coconut industry in Thailand will be augmented by maximizing the utilization of coconut into several high-quality and high- valued products. The major coconut products for domestic and export market are coconut milk/cream, coconut water, coconut nectar, young tender coconut, Nata de Coco, Coconut shell handicrafts, coconut fiber and virgin coconut oil. Those coconut products are produced by the large industrial enterprises, medium industrial enterprises and small cottage industries. For marketing and competition conditions, the big company shall emphasize on the market expansion, cost reduction, technology and new products development, trading alliance building as well as the creation of the company’ s market bases for more stability and customer recognition. Major targeted customer group is the foreign market highly purchasing power countries which consist of the United States, European Union, Japan and Australia.The company shell maintain the existing strong market base for more strength together with the building and expansion of the market base toward the markets where the company brands have not been satisfied for its total sales. In addition, the company shall create and maintain the positive image of the products for the customers’ reliability and trust of the company’s product forevermore.

Introduction

Coconut is widely grown thoroughly the country. In 2007, it covered 225,000 ha and produced 1,219 million nuts, decrease from 2000, 30.77 percent (table 1). The large coconut production are found in the Southern and Western regions. Coconut production in Thailand as in the hands of smallholders. Three quarters of total production is sold as fresh nuts uses in cooking or for other purposes, and the remaining quarter converted into copra. However, due to strong competition from other economic copra, coconut production has been declining since 2000. The most production areas are Prachab Kirikhan, Chumphon and Surat Thani as 17.80, and 11.91 percent of total areas, respectively. The varieties of planting are 91.74% for mature nuts, 6.10% for young coconut and 2.16% for nectary coconut.

*Senior Agricultural Scientist and Senior Scientist, Horticulture Research Institute, Department of Agriculture, Ministry of Agriculture and Cooperatives, Phaholyothin Road, Chatuchak, Bangkok 10900, Thailand.

215

In Thailand, coconut is completely a smallholder’s crop with about 1.0-1.5 ha per household in average and coconut farmers almost live below poverty line. For mature nut variety is almost Thai Tall variety; few are hybrid. The Hybrid which Department of Agriculture terminate, are Sawi hybrid No.1, Chumphon 60 and Chumphon.No.2 Totally hybrid grown in Thailand are 10%. Comparison coconut yields from Research station and farmer’s fields are 3.0 and 1.2. Average farm income of farmers is 280 US$ per hectare.

Coconut is one crop of importance, since it plays an important role in the economy of the country and on the daily like of the Thaipeople. It is a major source of employment, income generation and food. Owing to low income from traditional products such as mature nut, copra and coconut oil, product diversification for high value products is one approach that could increase farmer income. However, due to declining farm productivity and unstable markets of coconut products, Thais coconut farmers have been facing with a lot of difficulties in their coconut production and processing. Since the income from coconut is small when compared to fruit crops. As a result, coconut productivity would be decreased more, and in consequence, their incomes were small earlier now become least.

Unlike other coconut-producing countries, Thailand produces mostly young coconut for fresh consumption of their water (Liquid endosperm in the cavity of fruit). Although quite large areas are also grown with coconuts to provide products such as coconut milk (aqueous extract of solid endosperm, or coconut meat), desiccated coconut, dehydrated coconut, coconut chips, coconut water, coconut jelly (formed through fermentation of coconut water), coconut oil (by extraction of copra), etc. The palm’s unopened inflorescence can be manipulated to yield coconut or processed into alcoholic drinks (through fermentation), or coconut sugar (through boiling).

Table 1. Thailand: Area And Production of Coconut, 2000 – 2007

Year Area Production of Coconut 1000 Ha Million Copra Equivalent Nuts 1000 MT 2000 325 1,098 329 2001 326 1,117 335 2002 327 1,134 340 2003 328 1,146 344 2004 343 1,199 360 2005 344 1,204 361 2006 226 1,248 374 2007 225 1,219 366

Source: Office of Agriculture Economics

216 Coconut Products

Coconut Product diversification as a means of appropriate processing technologies is divided into two parts;

1. Edible Products 1. Coconut Chip 2. Coconut Sugar 3. Nata de Coco 4. Young Coconut 5. Coconut Milk 6. Virgin Coconut Oil 7. Coconut Nectar 8. Roasted Young Coconut 9. Honey Roasted Coconut 10. Dehydrated Sweet Coconut 11. Coconut Water

2. Inedible Coconut Products 1. Coconut Shell Handicrafts 2. Coconut Fiber 3. Coconut Midrib Broom 4. Coconut Midrib Basket 5. Coconut Soap and Lotion

The textual description of products, the processes and it profitability.

1. Edible Products

Coconut Chip

Coconut chip is the thinly sliced crispy coconut meat .It may be fresh tasting, toasted, sweeten or salted. It uses for snack food. It ‘s almost household products, few are industrial. Varieties suit for coconut chip are dwarf varieties; Sawi hybrid No.1, tall varieties; Sri Lanka, and Thai tall .The nuts shold be ten months old.

The processing of coconut chip is dehusking, coconut cutting. Separate the coconut meat from shell, remove paring with a sharp knife, slice meat with peeler. Mix 87 % sliced coconut meat in the mixture of 12 % sugar and 1 % salt for 12 hours in refrigerator,drain chips and dry in indirect dryer at 70 degree celclius for 15-18 hours. Allow to cool, pack in plastic bag or moisture proof polyethylene/foil bags or store in tightly covered glass jars and label with sticker, ready for sales . For industrial, packing in pouches of 30 grams, household making in plastic bag of 100- 120 grams.

The cost of production per dryer that uses 250 small coconut include ingredients, labour, electricity, packaging is 1,226.8 baht or 29.9 USD per one dryer. Profitability is 953.2 baht or 23.2 USD per dryer which can do 160 times per year.

217

The gross income of coconut chip production per year is 149,512 baht. or 3,646 USD The quality of coconut chip is good flavour and accept by the consumers.

Coconut Sugar

Coconut Sugar is mostly used for cooking, desserts, curries and some for raw material of food industries, eg. confectionery. Coconut sugar is made mainly by home industries in villages where coconut is grown. Export quantity has increased from 637,842 kilogram, value 21,213,490 baht in 1998 to 1,007,269 kilogram, value 19,520,315 baht in 1999. The United States of America is the biggest importer of palm sugar, others are Australia, Japan, United Kingdom, France, Canada, Saudi Arabia, Germany, Hong Kong and Netherlands, respectively.

The process of coconut sugar are divided into three steps; tapping of coconut sap, collection coconut sap and coconut sugar processing. The palm is first tapped for sugar when the second spathe emerges. It is gradually pulled down and held in place with string, when the spathe is 40 cm. Long. After about 6 days the spathe should be correctly positived for tapping. The spathe is cut about 6 cm. From the tip. The sheath is peeled off, exposing the spikelets which are then ties down with string. Sap is collected between 06.00 and 09.00 and again between 15.00 and 18.00 everyday. About 3 mm are trimmed off at every collection. A cylinder of bamboo or aluminum is place over the end of spathe. A single spathe may be tapped for up to one month, and a good variety may have 2 brunches in production simultaneously. After filtering, the sap is poured into a large pan holding about 60 litres. This is heated to boiling, so that evaporation takes place and the syrup becomes sticky. The pan is taken from the fire and put on the tire wheel. Slow continuous stirring to cool and stir the syrup using the stirring device until it nearly becomes hard. Pour sugar into the aluminum container or mould. Evaporation takes about 2 hours usually between 10.00 and 12.00 daily. The ratio between sap and sugar is about 7:1

Cost of coconut sugar production is 282 baht or 69 USD per 30 kilograms container or 9.40 bht/kg or 0.23 USD/kg g which include labour, fuel, bark of tree, aluminum container and other cost (fertilizer, processing equipments, etc). Sugar production per year will be 1,928 kg/year/rai/ (1 ha = 6.25 rai). Farmer’s gross in come 25,071 bht or 3,917.34 USD /rai/year.

Nata De Coco

Nata de coco, a gelatinous dessert delicacy, produced by the action of microorganism acetobactor xylinum on coconut water, sugar and acetic acid. Quality of nata is smooth, clear and chewy. It is sweeten by boiling it in sugar and water solution. It is also used as an ingredient in other food products such as ice cream, fruit cocktail. Analysis of nata de coco cooked in syrup or nata de coco preserve shows that it contains 67.7 % water, 0.2 % fat ,12 mg % calcium, 5 mg % iron, 2 mg % phosphorus, trace of thiamine and protein and 0.1 microgram % riboflavin. Based on this analysis, nata de coco preserve may therefore be considered as a food with out nutritive valve.

218 Nata de coco in Thailand is a household process. The process is divided into 3 steps; starter preparation, nata de coco production and nata de coco in syrup. Ratio of raw nata de coco is 1 litre coconut water 50 gms of refined sugar, 1 tablespoon of glacial acetic acid,3 gms of ammonium dihydrogen phosphate and 200 ml of mother liguor of acetobactor xylinum. This ratio can get 600-750 gms of raw nata de coco. The process of production is prepared coconut water, add refined sugar, ammonium di hydrogen phosphate, bring to boil for 10 minutes, allow to cool. Add glacial acetic acid and mother liguor, pour the mixture into clean, platic container, incubate in room temperature 8-12 days and nata de coco will be produced(thick 1-2cm.). Harvesting and soaking in several changing of water to remove the sour taste and smell for 3 days. Cut into cubes approximately 1 square cm or according to buyer specification. Boil in clean water 30 minutes and drain water out. For nata de coco in syrup, mix with refined sugar, ratio 1:1 together, leave for one night, put in jar, fill with hot syrup concentration 45 degree brix. Close container, sterilize in boiling water for 30 minutes. Allow to cool, label and sales. The products can store until one year. (for syrup: add 2 kg refined sugar, 1 litre water, bring to boil and filter before using.)

The cost of raw nata de coco production 6-7 baht per kg or 0.16 USD include the cost of coconut water, chemical, refined sugar, microorganism. Selling price of raw nata de coco is 18 baht or 0.44 USD per kg(grade A)and 14 baht or 0.34 USD (grade B).The cost of production of nata in syrup is 22 baht or 0.54 USD include jar ,refined sugar, raw nata, fuel The selling price is 30-35 baht.or 0.85 USD

Young Coconut with Opener

Young coconut with opener is coconut juice that is a terrific value in vitamins, flavor and freshness. Namphom young coconut is the variety are especially from Thailand that is the only stain of coconut with its own distinctive scent, good flavor, sweet taste. It is offered as a drink or a snack food and good for your health. Young coconut are carefully selected for the best quality and come from the most well known coconut farm in Thailand so that we are able to guarantee the quality of flavor and constant freshness all year round. Globular shape, green skin, white flesh, tender and sweet flesh and scented juice is criteria for raw material for processing. Australia, Europe, Japan, USA Taiwan, Hong Kong are the country that import young coconut from Thailand.

Young coconut are picked at eight months of age, when the peeled fruit has a diameter of 10 cm, its flesh weighs 100 gms, and the shell 120 gms. The total weight of the whole peeled fruit (shell + water) is nearly 500 gms, with 250 gms of water inside the nut. In harvesting, the whole bunch is cut off with a rope tied to the bunch, which is then lowered to ground to avoid damage to nuts as well as to keep all fruit in the bunch for easy transport to the packinghouse. Normally, young coconuts are harvested every 20 days, or 16 times per year. Each branch bears 10-15 fruits, or about 50-70 fruits bunch is transported to the packing hours for trimming of individual nuts. A sharp knife is used to trim off the side (to a cylindrical from with a little tapering downward), the top (to a come shape), and the bottom (flattened). Each trimmed nut is immersed in a solution (3-5 % sodium metabisulphite and 1-2 % fungicide, thiobendazole) for 5 minutes, then dried. This is avoid that the nut turns brown upon exposure to air. Wrap with pvc plastic sheet, attach the opener, straw,

219 spoon and wrap with pvc plastic sheet again. Attach carrying strap for convenience in transport. Packing in a strong carton which maintains the quality of the product during delivery. The shelf-life is 45 days in 3-6oC and 7-10 oC , 3 weeks for storage.

The cost of production of young coconut with opener is 20 baht or 0.49 USD per nut which include young coconut, cost of trimmed, solutions, plastics openers, packaging, transport and young coconut without opener is 7 baht/nut. The capacity of production of Daothong brand is 1-2 containers per week (1 container = 6,480 nuts or 720 boxes). The selling price (FOB) with opener is 32 baht or 0.78 USD, without opener 20 baht or 0.49 USD.

Coconut Milk

Coconut milk is the white, thick liquid, extracted from freshly grated matured coconut. It is commonly called “ Kathi”. It contains fat, protein, vitamins, sugar, amino compounds and minerals. Coconut milk is used for edible purposes, It is best as an ingredient in various dishes like exotic curries and other dish milk and preparation of desserts, etc. More than 12 factories of coconut milk/cream in Thailand. Domestics consumption and export market is needed. USA, Middle East, Taiwan, Japan, Hongkong, Australia, etc, are the country import coconut milk/cream.

The process of canned coconut milk is received white coconut meat, selected defect, washed and soaked in chlorine solution 50 ppm concentration. Keep in chilled containers temperature below 15 oC, water washing two times. Scraper and extract with screw press, 2 time, ratio of water depend on % fat. Pump coconut milk in steam jacket, boil 90 oC, 1 min, add food additive (gum) for thickener. Second boiling 90 oC, 1 min, homogenized 2000 psi, hot filling in can, seaming, can washing, retort 121C, 75 min. Cooling, air drying. Keep in warehouse, label and pack into carton. Ready for sales. Packaging of coconut milk are in cans size No. 283,355,567 or tetra bricks of 250 ml, etc. Shelf life is one year if properly stored in clean, cool and day place, away from direct sunlight.

The cost of production for industrial scale depend on packaging coconut meat, labour, electricity, chemicals cost is not known. The export-selling price depends on the company or market. For export market almost is in can, domestic market in tetra pak. For domestic market, tetra pak (250 ml) is 10 baht or 0.24 USD; can 283 ml is 8.50 baht or 0.20 USD.

Virgin Coconut Oil

Virgin coconut oil is generally processed from the coconut cream (upper layer, after the coco skim milk is separated) either by slow heating or fermentation /settling for 24 hours. If slow heating is done to recover the oil, the coconut protein that coagulated can be eaten as is or added to some food preparation. This is another by- product for nutritional enhancement. However, if the recovery of the oil from the cream is done by fermentation or settling, then the resulting by-product could not be eaten. When coconut milk is extracted from the grated coconut meat, a solid residue is generated as well. The residue which is normally thrown away can be used as a

220

food ingredient Coco burger is mainly made from residue and beef with spices and other ingredients. Okoy is mainly made from residue, grated pumpkin with shrimps, spices and other ingredients. The coconut residue can also be used for making cookies and macaroons. Adding residue to various food recipes essentially fortifies the food products with dietary fiber and dietary fat which are essential for good nutrition. In addition, in the coco burger recipe, the residue acts as a meat extender in addition to the health benefits being contributed by the dietary fats and fibers, thus making the product very suitable for large families since it has also become cheaper in cost. Dried coconut residue contains 31.9 % dietary fiber, 38.3 % fat and 5.1% protein. The coconut fat is mainly composed of medium chain fatty acids which have been shown in several studies to have antibiotic, anti-obesity, anti-cancer and other beneficial effects on the human body. Likewise, it aids the body in absorbing micronutrients and vitamins.

The processing steps and critical control point is as follow:

- Selection of nuts-select fully matured nuts (12-13 month old) - Splitting and grating–split the dehusked nut into two and grate the meat either manually or thorough the use of motorized grater - Extract the milk from the grater coconut meat either by hand or by manually operated press. This can be hydraulic type or vertical screw type press .Set aside the milk obtained. Prepare the coconut milk residue or sepal for second extraction - Do a second milk extraction by mixing water with the sepal obtained from the first milk extraction using a ratio 2 parts sepal, 1 part water and pressing again - Mixing of first and second milk extract, mix thoroughly the first and second milk extract - Setting the coconut milk mixture – allow the coconut milk mixture to stand for a maximum of three hours preferably in the refrigerator or in a container with ice - Decanting – separate the cream (oily portion) from the coco skim milk (watery portion) by decanting .Set aside the skim milk - Slow heating of the coco cream-place the coco cream in a pan and heat very slowly to coagulate the protein and release the oil - Separation of oil and latik – separate the oil from latik by filtration using muslin cloth .Set aside the latik - Oil drying – place the extracted oil in a double boiler and heat for about fifteen minutes or until all residual water in the oil is removed - Filtration - filter the oil to remove fine particles of coagulated protein. - Packaging and storage-place the oil in a very dry bottle for storage

Virgin coconut oil can be produce directly from the flesh comminuted (grate, chopped, granulated) coconut meat, or from coconut milk or from coconut milk residue (Figure 1).

221

At present, the scale of operation for processing virgin coconut oil are many small collage industries which use the modified natural fermentation method and a few medium industrial enterprises which use the centrifuge process. Most of medium industrial enterprises use the Pressure Oil Extraction Method. There are no large industrial enterprises in Thailand to produce VCO.

The cost of production is approx. 120 baht depend on coconut price, electricity and packaging. Fifteen nuts can produce one litre of virgin coconut oil .The bulk selling price is 300 baht per litre. It should noted that there are really instances where the price of copra will be so low that it is no longer viable for farmers to harvest and process the nut.

Coconut Nectar

Coconut nectar is a special beverage from coconut inflorescences. It is sweet, oyster white and translucent. It is high nutritive value, vitamins and minerals. Coconut nectar or sap can be used in two ways; served fresh as a beverage, or processed into coconut sugar; both have been consumed by Thai people since time immemorial. Export and domestic consumption are used. The export country is USA, Hong Kong, etc. At present there are five factories in Samut Songkram Province, the province with the highest maphrao tan in the kingdom.

The collected coconut sap is a ready-to-drink beverage once bark and inflorescence debris have been filtered out. Boiling at 100oC for 1 hour until concentration of solution become 18-20obrix. Leave the solutions for 1 hour to sediment. Move clear solutions, filter and mix with boiling water, standardized to 15 brix. Hot filling in glass bottle, closing, sterilization at 121oC, for 15 min, cooling, labeling for sales. The shelf life is one year

222 The cost of production is 110 baht or 2.69 USD per box (24 bottles, 355 ml include coconut sap, bottle, paper box, electricity labour). The whole selling price is 130 bath or 3.17 USD/box. The retailer price is 9-10 baht or 0.23 USD/bottle. There are many brands in market eg. Co Co, Co Co Land, Sai Petch, Nam Tan Chot, etc.

Roasted Young Coconut

Roasted young coconut is a unique method of preparing in order to sweeten its water and tender meat as well as enhance their flavor. This products almost domestic consumption, some export to Malaysia, Hong Kong and Singapore. The dwarf vaiction, Nam-phom, Nam-wan, Musi and other dwarf varieties and used.

The process is dehusking coconut, trimming the shell by a machine. Boiling the nets in the solution (2% sodium meta-bisulphite ) for 20 minute. Drying and burning the finishing touch by exposing the nut to the fire for a minute or so until the shell itself shows signs of burning (perhaps to make it attractive to customers). The fruit is kept at room temperature for 3 days or in the refrigerator for larger storage. Chilling it will make its water more refreshing to drink. The water from the roasted young is quite refreshing as it is quite sweet and aromatic. The tender meat which is easily removed from the shell, is also sweet and aromatic. Before roasting the nuts, usually burning whole nuts, that creates environmental problem from the smoke. So technique has been developed.

The cost of production is 3.25 baht or 0.08 USD/nut (include cost of young coconut, labour, dehusked, trimmed. Boiling, roasting). Selling price (medium nut) is 5 baht or 0.12 USD/nut at plants. Capacity is 3,000 nuts per day. Retail market in Bangkok is around 7-10 baht or 0.17 – 0.24 USD.

Honey Roasted Coconut

Honey Roasted Coconut is a sweet, thinly sliced crispy coconut meat. Honey roasted coconut is eaten as snack food. Market is for domestic consumption. Matured coconut (green husk) is used for processing, almost Thai tall variety.

The method of processing is: - cut dehusking coconut into half - separated the coconut meat from the shell - removed paring with a sharp knife - Sliced the coconut meat with a peeler - Mix coconut slided meat with the mixture which is honey, sugar, margarine, sweeten condensate skim milk, molasses, salt together - dried in oven for half an hour. - agitate frequently for 15 minutes until it become crispy. - allow to cool, pack in pvc plastic bags volume 200 mg - labeling - Ready for sales.

223

Retailing price is 25 baht or 0.61 USD per pack or wholesale price is 16-17 baht or 0.40 USD. The cost of production is 10 baht or 0.24 USD include cost of coconut meat, labour, electricity, packaging and solutions mixture.

Dehydrated Sweet Coconut

Dehydrated Sweet Coconut is sweet, dehydrated coconut meat. It is eaten as dessert. Market is for domestic consumption. Young coconut meat is used for processing, almost green or yellow dwarf variety.

The method of processing is: - cutting dehusked coconut into half - drained coconut water out - separated coconut meat from the shell - soaked coconut meat in coconut water - removed paring with a sharp knife - soaked coconut meat in coconut water again - washed with clean water - cutting meat with sharp knife into two pieces in longitudinal section (depend on grading quality of final products) - soaked in 10% salt soltion - mixed slided coconut meat with refined sugar and water ratio 6:3:1 and boiled for 1 hour or until it is dried - Allowed to cool, pack in PVC plastic bag. - labeling - ready for sales

Cost of production 54.6 baht or 1.33 USD/kg. (include coconut, refined sugar, gas for cooking not in clude labour cost). Retailing price is divided into grade, grade A is 90-100 baht or 2.3 USD, mixed grade is 80 baht or 195 USD. and slided grade is 50 baht or 1.22 USD, The average net income is 30.4 baht or 0.74 USD/kg.

Coconut water

Many factories are engaged in the production of processed coconut water, mainly for export markets. The procedure includes boiling and adding sugar to reach 9o Brix sugar content, packing in can while the water is still hot, sterilizing at 116o C for 30 minutes and sealing. Such 9 product is also available in plastic bags. It can also be frozen (at -10oC), or concentrated to save space in transportation.

224

2. Inedible products

Coconut Shell Handicrafts

Coconut shell handicrafts is made of coconut shell, such as necklace, bracelet, bag, belt, ladle, buttons, lamp shade, tray, coffee pot, cup, serving set, spoon, serving spoon, gift set, ear ring, bowl, key ring, etc. There are used in domestic market and export market. In 1999 production income is more than 5,000,000 baht. Coconut shell for handicrafts should be thick, fine shell and round, glubular shape depend on the purpose of used. Import country is USA, Canada, Japan, Italy, Germany, France, New Zealand, Australia, Sweden, Holland, Malaysia, Singapore, Philippines, etc.

The process of making handicrafts is selecting hard, thick and fine shell. Choose color, shape of shell suit the designs. Globular and round shape is always used. The step of processing is cutting, trimming, polishing, drawing in patterns of designs, and setting to be ready for sales. For handle of products eg: ladle, fish slice, spoon, serving spoon, serving set, conventional wood and coconut wood are used.

The cost of production is include coconut shell, handle wood, electricity, materials depend on the products, not include labour cost because it’s household making, for example serving set 9 baht or 0.22 USD/piece, ladle 5 baht or 0.12 USD/piece. Selling price of serving set is 70 baht or 1.7 USD/piece and ladle is 15 baht or 0.37 USD/piece. The average gross income per person is 5,000 baht or 121.9 USD/month

Coconut Fiber

Coconut fiber is a fibrous material obtained from coconut husk. Color range from light to dark brown depending on the maturity of nuts and time. Thailand is produced brown fiber from mature nut. Texture is stiff, elastic pliable, resilient and resistant to bacterial attack. Coconut fiber is used for car seat stuffing, mats, rubberized bed, upholstery cushion, etc. There are 17 Thailand coir fiber-processing plants.

The process of production of coconut fiber is start from the husks that usually obtained as by product of copra or wholesale coconut market and thus fully matured. Matured green or brown husks are sprinkled with water and fed to a machine called decorticator. The decorticator continuously beats the husk with steel paddles to separate the mixed fiber from coir dust. The mixed fiber obtained from the first pass is cleaned by passing it again though the decorticator. It is then dried and baled. The finished product is 140 kilograms per bale and bound with heavy straps.

The capacities of medium plants 4.2 tons per day have cost of production (husk, labour, fuel and electricity cost) 6,534 baht or 159.4 USD. Net selling price 2.60 baht or 0.06 USD per kg. or 10,920 baht or 266.34 USD per day. Profitability is 4,386 baht or 107 USDper day or 1.04 baht or 0.02 USD per kg.

225 Coconut Midrib Broom

Coconut midrib broom is a broom from coconut midribs. It is household products in the coconut areas. Domestics use, not export.

The Processes are many steps: - The materials are coconut midribs, plastic string, elastic rubber string, bamboo stick for broomstick, nails - Select broomstick 1.15 meter, length - Screw at the top part, 5 cm apart from the top - Put the 12 cm small stick bamboo wood across the pole, wrap tightly with plastic string - For midribs, lie in a row and make as a sheet using plastic string until 70 cm length - Put midrib sheet connect tightly with broomstick using small nails - Wrap midrib sheet around broomstick until full, 35-39 coconut midribs - Fix with nails - Ready for sales

The cost of production include coconut midrib, bamboo stick, Plastic string, elastic rubber string, nails is 6 baht or 0.15 USD/piece (not include labour cost). Selling price is 15 baht or 0.45 USD. Net income is 9 baht or 0.2 USD/piece

Coconut Midrib Basket

Coconut midrib basket is a basket from coconut midrib. It is household product, in the coconut or basketwork areas. Matured, long coconut midribs are used.

The processes are in many steps: - The materials are coconut midribs, plastic string - Lie midribs in round shape, make a basement of basket by crossing midribs in circular - For beside wall, cross midribs like hair-line until be basket - Ready for sales

The cost of production (medium size) include coconut midribs, plastic string is 4 baht or 0.1 USD per piece (not include labour cost). Selling price is depend on size, if medium size, is 12 baht or 0.3 USD. Net income is 8 baht per pieces.

Coconut Soap and Lotion

Coconut soap and lotion is products that produce from virgin coconut oil or coconut oil. The quality of soap from virgin coconut oil, produce smooth cream, white color, and good dissolve in water. The coconut lotion contains are all natural ingredients does not contain chemical preservatives that is harmful to the body and carry your favorite scent or blend of essential oils. The process can do as village level.

226

The process steps is for one kilogram of soap by mixing continuously of mixture of 608 gram virgin coconut oil, 104 gram of sodium hydroxide, 273 gram of water and 15 gram of aromatic essential oil until it smooth. Pour into mould, leaving 24 hour or until its hard. Take out from mould and leave for a month before used. Basic component of lotion and creams are water, and oil emulsifying agent which allows them to combine.

The cost of production is mainly from chemicals, virgin coconut oil and essential oil .The selling price is 20-25 baht per one soap.

Export of Coconut Products

Coconut milk / cream is the biggest export product both in terms of volume and value but the statistics of both volume and value are not available.

Young Tender Coconut exports totaled to some 3,955 MT and 3,452 MT in 2005 and 2006 respectively; with an FOB value of US $9.317 M in 2005 and US $ 10.01 M (Table 1). The major importing countries of Thailand young tender coconut are the USA, Taiwan, Hong Kong, Malaysia, China and Singapore.

Desiccated Coconut Exports totaled to some 588 MT and 667 MT in 2005 and 2006 respectively, with an FOB value of us$0.3 M in 2005 and us$ 0.29 M in 2006.

The major importing countries of Thailand Desiccated Coconut are Burma, China, Pakistan, Bangladesh, Jordan and Australia.

Exports of copra totaled 2 MT and 44 MT in 2005 and 2006 respectively with an FOB value of us$0.005 M in 2005 and us$ 0.018 M in 2006.

The export volume and value of coconut oil have been noted to be on a decreasing trend, from 3,635 MT in 2004 to 494 MT in 2006. Similarly the volume of copra meal have decreased trend, from 127 MT in 2004 to 1 MT in 2006.

The export volume and value of coconut sugar have been noted to be on an increasing trend, from 9 MT in 2004 to 38 MT in 2006. Similarly the volume and value of activated carbon have increased trend, from 6557 MT in 2004 to 30,588 MT in 2006.

The major importing countries of Thailand activated carbon are Japan, the USA, Venezuela, the Netherlands, Spain, Indonesia and Mexico.

Exports of coconut fiber totaled 66 MT and 27 MT in 2005 and 2006 respectively, with an FOB value of us$ 0.097 M in 2005 and us$ 0.04 M.

227 Table 2. Thailand: Coconut Export Profile, Volume: MT, Value: US$ million

Commodity 2004 2005 2006

Quantity Value Quantity Value Quantity Value Young tender coconut 2,946 7.743 3,955 9.317 3,452 10.01

Desicated coconut 574 0.22 588 0.3 667 0.293

Copra 2 0.01 2 0.005 44 0.018

Coconut oil 3,635 1.75 2,675 1.55 494 0.63

Coconut sugar 9 0.007 10 0.017 38 0.029

Copra meal 127 0.017 50 0.002 1 0.005

Activated carbon 6,557 6.24 8,226 7.933 30,588 7.993

Coconut fiber 12 0.037 66 0.097 27 0.04

Marketing and Competition Conditions

Competition Strategy

The coconut industry should emphasize on the market expansion, cost reduction, technology and new products development, trading alliance building as well as the creation of the market base more stability and customer recognition. The coconut industry has advantage and disadvantage points as follows:

Advantage

1. The products are in diversity and be able to respond to the market requirement and produced to feed the market consistency. 2. The product standard is well recognized by the foreign importers. 3. The products are recognized and well marketed abroad. 4. The products are well distributed in foreign markets not only in the specific areas, thus, it helps to reduce the risk on trade sanction.

Disadvantages Some parts of the channels are still relied on the selling through the brokers.

Sales and Channels of Sale

The company should not only directly export to the foreign importers, but also sales should be made through brokers as another selling channel, to increase the export sales. Therefore the products of the company have to spread to the markets worldwide over 65 countries.

228 Problems and Constrains of Coconut Processing Sector Including Marketing and Export

1. Value of Thai bath currency

In the preceding year, the bank of Thailand attempted them to support the value of bath currency in comparison with US dollar to ensure that it would be not too strong through the measure of fund investment reserve at 30% requirement imposed on short-term foreign investment brought into the kingdom. However, the US dollar is still weakening while Thailand incurred a trade surplus. The exports in 2007 were greater than imports over US$ 10,000 million, thus, revocation of such measure may cause the bath currency to strengthen to the level of 30 baths per 1 US dollar.

2. Fuel Oil Costs

Researchers have revealed that the logistic costs of agro-industrial products of Thailand have accounted about 20 -30 % of the production costs. Therefore, if the crude oil price has gone over US$ 100 per barrel, the coconut industry will incur a large amount of production costs, including cost raw materials, transportation and fuel oil.

3. Packaging Cost

As the steel metal price has adjusted higher, due to the increase in demand and the fuel oil price, the cost of the steel coated with tin which used to produce the containing cans has grown up until the price of can has been up 10%, at the beginning of 2008. The canned food industry, including water coconut water for drinking and coconut milk incurred the higher package cost about 30-50 % of the total production costs. Thus, the coconut industry has required to adjust the product price and that may affect the sale volume in major markets such as the USA which is currently in economic recession.

Conclusion

The large industrial enterprises have had much success in their technology and new products development. They are rarely facing the problem of raw material insufficiency due to their skill in procurement of raw materials, either in term of quality or prices. For small cottage industries, they still need the government to support the fund marketing and technology transfer on processing as well.

References:

1. Naka,P.,et al. 2001. Feasibility studied on coconut palm sugar and coconut shell handicrafts production and marketing for Thailand coconut based processing and livelihood project. COGENT/IFAD report, 56 pages.

229

2. Naka,P., 2001. Coconut shell handicrafts catalogue of Thailand, COGENT, 10 pages.

3. Naka,P., 2001. Catalogue of coconut products in Thailand. COGENT, 36 pages.

4. Naka,P.,et al , 2002. Identifying researchable constraints and opportunities to enhance incomes and reduce poverty in coconut growing communities in Thailand, COGENT/IFAD report. 57 pages.

5. Naka,P.,et al. 2002. Establishment a frame work and selecting project site for a nationwide development of coconut-based poverty reduction interventions incoconut growing communities using COGENT’s 3 pronged strategy in Thailand, COGENT/IFAD report, 36 pages.

6. Office of Agriculture Economics. 2002. Agricultural Statistics of Thailand crop year 2003/2004.

230