The early 1990s were good times for the local coconut industry, particularly for those producing nata de coco—a jelly made from coconut water that is used for making popular Filipino desserts like halo-halo. From the 200 metric tons of nata de coco exported in 1990, shipments surged in subsequent years due to the spike in demand. Citing data from the Philippine Coconut Authority, a Philippine Institute for Development Studies (PIDS) discussion paper indicated that exports jumped to 14,303 MT in 1993 and 15,832 MT in 1994.
A study conducted by the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) noted that the shipments of nata de coco skyrocketed in 1993 due to the huge demand for it in Japan. A small food company in Japan, the study indicated, built the image of nata de coco as health food through advertisements. Nata de coco was then distributed for sale to restaurants and groceries, eventually becoming a favorite diet food and used as ingredients for drinks.
The same SEARCA study noted that nata de coco is already being exported to several countries like the United States and Europe in the 1980s. The biggest demand for nata de coco, however, came from Japan. The Japanese considered nata de coco a health food for several reasons including its anti-cancer properties and the belief that it is good for pregnant women.
The study, which was published in the Philippine Journal of Crop Science, noted that the Japanese liked its taste as well as its effect on their health. Because of this, food processors in the Philippines were asked to supply the Japanese market with sweetened nata de coco. These food processors encouraged new growers of nata de coco to respond to the demand of the food traders in Japan.
However, two years after nata de coco shipments increased by leaps and bounds, exports fell by more than half to 6,091 MT in 1995, according to data provided by the same PIDS discussion paper. By 1997, exports of nata de coco fell below the 6,000-MT mark.
The SEARCA study noted that the decline in nata de coco demand was due to a number of reasons including oversupply and the rumor on the presence of formalin and other chemicals in nata de coco shipments from the Philippines. Despite the unfounded rumors, the buyers of nata de coco became very strict and choosy on the quality of nata de coco they buy. The authors said the buyers even formulated a letter of agreement to assure that the product had no unwanted chemicals. This and another rumor on rejected shipments were enough to destroy the growing market of nata de coco.
The experience of the nata de coco industry in the 1990s should serve as a cautionary tale for those pushing for the cultivation of certain crops due to fads. It should do well for policymakers to also remember that trade regulations in the 1990s were less stringent compared to current guidelines. Local producers must therefore be given assistance not only in terms of hiking production but also in meeting the stringent standards of importing countries, such as the United States and those belonging to the European Union.