Coffee sector sees RCEP opportunity

THE coffee industry said it expects to benefit from the Regional Comprehensive Economic Partnership (RCEP) Agreement, standing apart from the rest of the agriculture sector, which has raised the loudest objections against the trade deal.

The ASEAN Free Trade Agreement (AFTA) already allows all Association of Southeast Asian Nations (ASEAN) coffees to come in and out freely, Pacita U. Juan, vice-president of the non-profit ASEAN Coffee Federation, said.

“RCEP for coffee adds Japan, Korea, and China (to the mix),” she said in a Feb. 3 Zoom call.

AFTA was a stress test for the coffee industry, Ms. Juan added: “If it were to shake up the coffee industry, it should have shaken it up already.”

RCEP will help farmers if the Philippine coffee industry avoids commodification and works out a way to promote its beans as products with distinctive origins, according to Ariestelo A. Asilo, a social entrepreneur and co-founder of Varacco, Inc., a food and beverage company.

“This free trade agreement will benefit farmers — as long as we strengthen our geographical markers of coffee and rice,” he said, referring to geographical indications (GI) system. “In other countries they have chocolates, ours will be coffee.”

A GI is “an indication that identifies a product as originating in a territory, area, or location, and where a given quality, reputation, or other characteristics of the good are primarily related to its geographical origin and human factors,” according to the Intellectual Property Office of the Philippines.

The opportunities lie in crop resilience research, Mr. Asilo told BusinessWorld. More can also be done to improve production and post-harvest facilities, he added.

In a February 3 phone call, he said the Philippines produces 60,000 metric tons (MT) of coffee a year, yet demand for the product is 160,000 MT.

Revenue generated by the Philippine coffee industry is projected at $6.70 billion in 2023, according to Statista.

The average volume per person for 2023 is expected to amount to 1.36 kilograms.

Mr. Asilo cited the potential of liberica — known in the Philippines as barako coffee — which is one of the major commercially grown varieties apart from excelsa, robusta, and arabica.

“We have really good coffee. Our (flavor) profile is really good, and we are also one of the few countries that grow all four coffee bean types,” he said.

Opportunities also lie in specialization, Ms. Juan said.

The Philippine Coffee Board, of which Ms. Juan is president and cochair, has been teaching farmers to process robusta beans into specialty robusta.

“We call it fine robusta. It’s almost like arabica. If you produce 7,000 metric tons and make it fine robusta, you can double the price without doubling production,” she said.

“We try to make small-production specialty coffee, meaning if we produce only 30,000 metric tons, then it might as well be well-priced, (not treated like a) commodity,” Ms. Juan added.

RCEP can help in this department, she said. South Korea, for one, tends to buy low-volume but high-value coffee.

“We’ve managed to create a specialty coffee image for the country. RCEP will allow us to export this to high-end buyers such as Korea and Japan,” Ms. Juan said.

Ms. Juan acknowledged that the rest of the farm industry is in a different situation in the RCEP debate.

“Coffee is a different product. We’re blessed that were not as perishable as onions and pechay (bok choy),” she said, “but for the ordinary farmer, (it will really be a deluge) of vegetable imports.”