Baling Production

The production sector performed better in 2005 as baling production of abaca fiber exceeded last year's output, although very slightly by 2.2%. Output level in 2005 reached 61,795 mt, up by 1,319 mt from the 60,476 mt in 2004. The farm sector in some of the producing regions managed to withstand the disturbances brought by both natural and man-made calamities. One of the motivating factors among abaca farmers was the continuous price increases due to the strong demand of both local and foreign buyers for certain grades, especially pulp grades.

The biggest portion (55.7%) of the total increment (1,319 mt), however, consisted of less in demand grades such as OT (389 mt), M1 (255 mt) and AD-1 (91 mt). The hefty increase in M1 could be partly due to the practice of some farmers in Eastern Visayas to produce fair grades since a stalk can yield a kilo of fiber whereas for excellent grades, two to three stalks are needed to produce the same one kilo of abaca fiber. Hence, users, particularly of major grades, in both the local and international markets were consistently complaining of not getting enough supply of grades that they required, triggering the continuous escalation of buying prices for abaca fiber.

Baling production of abaca fiber in all producing regions except for Bicol and Southern Mindanao accelerated, most of which recorded double-digit increments. Outputs of Bicol and Southern Mindanao were down by 9.5% and 9.1%, respectively, with corresponding total of 16,432 mt and 9,410 mt in 2005. In Bicol, the downtrend in baling production was traced to the low output levels in Catanduanes, the Philippines' top producer of abaca fiber, and Camarines Sur arising from the unstable weather condition brought by the frequent rains and the series of typhoons experienced during the early part and last quarter of the year. There was also a sudden demand for bacbac twine by the furniture industry especially during the beginning of 2005. Some furniture makers distributed bacbac twining machine to ensure the stability of the supply of bacbac twine. Because of this, some farmers used not only the outermost covering (bacbac) but also the inner leaf sheath of the abaca stalk which is the source of grades S2 and S3. As a result of the drop in overall output, there were low sales turnover within the region to fibercraft processors and the export market although there was improvement in disposals to pulp and cordage manufacturers.

In Southern Mindanao, baling production of abaca fiber was down to 9,410 mt in 2005 against the 10,357 mt attained in 2004. Davao Oriental, the biggest producer in the region, registered a 20.4% contraction in its output to 4,563 mt this year from 5,736 mt a year earlier owing to the uprooting of disease-infected abaca plants as part of the continuous disease eradication activities in the province. Similarly, baling production in Compostela Valley was cut by almost half of last year's output, to 154 mt from 288 mt. The combined drop in output of these two provinces totaling 1,307 mt was not compensated by the rise in baling production in the rest of the producing provinces - Davao del Sur, Davao del Norte, South Cotabato and Sarangani.

Farmers in Eastern Visayas were able to increase their output in spite of disease infestation of abaca farms especially in disease-free areas as a result of the ongoing abaca farm expansion. Aside from expansion, rehabilitation of abaca farms is also being undertaken to cushion the adverse effect of disease infestation. There was also brisk buying of abaca fiber this year within the region as buyers competed for available supply such that some traders operating in Eastern Visayas had to source abaca fiber from other regions. Aggregate baling production in Eastern Visayas was 23,849 mt, registering a 10.6% increase from the 21,566 mt recorded in 2004. Except for Leyte and Samar, baling production in the rest of the provinces rose with Eastern Samar posting the biggest increase with a record high of 400 mt this year from only 6 mt a year earlier. This further boosted the region's position as the country's premier producer of abaca fiber. Overall share of Eastern Visayas to aggregate baling production improved to 38.6% from 35.7% the previous year.

Central Visayas, Western Visayas, Northern Mindanao and Caraga recorded double-digit increments but the quantities of baling production were relatively small. Output of Central Visayas nearly doubled with the hefty increase coming from Negros Oriental. The province had a baling production of 440 mt compared to 207 mt last year, consisting mostly of excellent grades which were used by the handloom weaving industry. The rest of the fiber was traded to Cebu-based processors and exporters whose products were destined for Japan.

Meanwhile, there was an increase of 275 mt (42.9%) in baling production in Western Visayas backed by the significant growth in output of Aklan and Iloilo. Baling production of abaca fiber this year totaled 916 mt. Suppliers in Aklan and Iloilo noted the intensified buying of abaca fiber as evidenced by the number of traders especially from Leyte sourcing abaca in the region. Antique, unlike Iloilo and Aklan, is not consistently producing abaca such that in 2005 it recorded baling production only in July and August. Nonetheless, its output of 4 mt in 2005 was far better than the one metric ton it registered a year earlier.

With the upsurge in baling production in three of the four abaca-producing provinces in Northern Mindanao, aggregate output reached 1,525 mt, higher by 54.2% from a year-ago level of 989 mt. Misamis Occidental had the highest rate of increment in the region as its output was nine times higher than last year at 51 mt followed by Misamis Oriental, the output of which more than tripled reaching 266 mt. Bukidnon was still the principal producer in the region contributing 1,205 mt or 79.0% of total baling production during the period under review. The upswing in baling production in Northern Mindanao was brought about by the assurance of ready market for their produce with the presence of traders now operating particularly in Misamis Oriental.

A 12.2% growth in baling production in Caraga was noted arising from the increase in outputs of Surigao del Sur, Agusan del Sur and Agusan del Norte during the comparative period. Agusan del Norte posted the highest rate of increase at 122.2% to 382 mt followed by Surigao del Sur at 34.9% to 3,517 mt. Output of Agusan del Sur likewise soared by 8.0% with total baling production reaching 898 mt. There was increased trading of abaca fiber during the year because of the presence of big traders from neighboring regions who directly competed with the local traders. This situation resulted to high buying prices for abaca fiber which local traders found very expensive. Furthermore, the favorable weather condition prevailing during the first three quarters of the year as well as the healthy abaca plants in these provinces contributed also to the growth of baling production in the region. The region's output is expected to improve further with the distribution of several units of mobile stripping machines during the year.

Output of Western Mindanao stepped up by 4.5% in 2005 compared to the 2004 level. Meanwhile, baling production in Central Mindanao remained close to last year's level at 1,989 mt accounting for a 0.6% increment. The continuous hike in buying prices offered by buyers and the market information drive conducted by fieldmen to inform farmers of the strong market demand for abaca fiber encouraged them to better their performance output.

Baling production in Southern Tagalog this year was twice as high as last year due to the opening of additional markets in Metro Manila. Production would have been better had there been no flash floods caused by the collapse of the protective dike in the town of Naujan in the latter part of the year that adversely affected the abaca areas in Mindoro Oriental. From only 31 mt, output grew to 62 mt this year with 43 mt coming from Mindoro Oriental and 19 mt from Aurora.

In the latter part of 2005, 4 mt of abaca fiber were produced and baled for the first time in Natonin, Mountain Province which were then shipped to buyers in Metro Manila. There were about 12 hectares of abaca farm in the province.

In 2005, G was the biggest contributor to aggregate output with 13,920 mt followed closely by JK with 13,068 mt. Their shares of 22.5% (G) and 21.1% (JK), however, were slightly lower than last year's figure of 22.9% for G and 21.6% for JK.

Baling production of all grades except S3, H and Y went up this year compared to last year. Among the hand- and spindle-stripped fiber (excluding OT), M1 posted the highest rate of increase at 16.5%, or from 1,541 mt to 1,796 mt. M1 is primarily utilized for cordage manufacturing and is used by grading and baling establishments in tying bales of fibers. Decorticated abaca, particularly AD-1, had remarkably increased by 252.8% with output totaling 127 mt this year compared to only 36 mt last year. Decorticated abaca is used as raw material in the production of pulp.

Output of H and S3, considered as cordage grades, declined by 7.4% and 2.7%, respectively during the period under study. Baling production of H totaled 2,113 mt while S3 reached 3,593 mt in 2005. Likewise, baling production of Y was down by 4.9% to 4,859 mt this year.

Following the rise in baling production of all the top grades, the contribution of S2, I, G, JK slightly went up to 76.4% (47,200 mt) from last year's 76.1% (46,027 mt). S2 posted the highest rate of increase at 8.0% to 11,779 mt while G grew the least at 0.5% to 13,920 mt during the comparative period. Accordingly, some farmers especially in Bicol preferred to strip more of S2 as it commands higher price than S3 which are both of excellent cleaning

In 2005, the bulk (81.5% or 50,349 mt) of baling production consisted of hand-stripped while 11,316 mt were spindle-stripped. The rest was decorticated abaca which
was used solely for pulp production. Compared to last year, baling production of hand-stripped abaca stepped up by 5.4% while spindle-stripped reduced by 10.7%. Some abaca strippers might have opted to hand-stripping partly due to the rising cost of fuel needed to operate the stripping machine.