The Department of Agriculture (DA) has secured an additional market for abaca fiber through a Central Bank resolution and a memorandum from the President calling for the use of abaca for peso banknotes.

The use of abaca fiber was authorized for P100, P500, P1000, and P2000 circulation

Agriculture Secretary Edgardo Angara said this will boost the abaca pulp market by some 200-250 metric tons per year. Among non-abaca producing countries, Japan for years has been using abaca for its banknotes.

For the first five months of the year, abaca production grew by 8% to 33,680 metric tons compared to 31,178 metric tons during the comparative period last year. Exports of almost all abaca products also increased, resulting in a significant rise of 27.6% in export revenues, to $41.2 million from $32.2 million during the same period last year.

The export value is expected to reach $90 million by the end of the year.

Exports of abaca products have been on the uptrend after the economic downturn in 1997 and 1998. Abaca fiber exports increased by 8% in 1999 and by 7% in 2000 due to a substantial increase in purchases of the United States and United Kingdom. Exports of abaca pulp grew by 15% during the first six months this year.

In a memorandum to Secretary Angara, Administrator Joaquin M. Teotico of the Fiber Development Authority (FIDA) projected expansion of abaca production with the opening of another abaca pulp mill in Albuera, Leyte, with a daily pulp capacity of 10-20 metric tons, which requires about 6,000-12,000 tons of abaca fiber.

He also reported the resumption of operation of a major cordage mill in Albay.

Likewise, there were numerous possibilities for expansion of the markets with Spain shifting its sourcing of abaca fiber requirements form Equador to the Philippines; with China and Eastern European markets remaining untapped for abaca use in cigarette papers and tea bags, and; with the viability of abaca as substitute material for wood pulp in the paper market.

Administrator Teorico reported that Ecuador remains the only current producer of abaca but noted that a likely competitor, Indonesia, has plans to produce abaca fiber. Some Indonesian companies have reportedly been approaching US-based abaca pulp and paper manufacturers, offering to supply them with their abaca requirements, most of which are nowsupplied by the Philippines. (Rico C. Navarro)