Buying and Selling Copra

BUYING AND SELLING OF COPRA AND COCONUT PRODUCTS IN SOLOMON ISLANDS

Coconut growers who produce nuts processes these nuts into copra. The majority of growers are household units with 5-6 family members growing coconuts on customary land. There are also some communal or cooperative plantations, church-owned plantations and rural training centre farms.

Some smallholder households do not grow commercial quantities of coconuts but have 10-20 palms for their own food consumption and to feed their pigs. Others sell immature nuts for drinking, dry nuts to copra processors or trade stores, or may dry their own nuts into copra to sell to rural copra traders, copra mills or copra exporters.

Increasing amounts of nuts are being sold to VCO operators but this still represents less than 1% of coconut production.

Market Intermediaries

The most important are the rural copra traders who purchase copra from growers and forward it to the exporters, who are all based in Honiara. Transport of copra from the grower to the rural trader is generally by boat, but some is by road on some islands. The rural traders accumulate shipments for forwarding to the exporters in Noro and Honiara.

There are three main copra exporters (Solomon Islands Copra Export Ltd, JAMCOP and Coconut Bio Energy) plus a few smaller operators who export irregularly. There are also dry and drinking nut buyers who supply the domestic and export markets and trade store owners who buy nuts and produce copra.

Some of these also sell nuts to VCO producers who in turn sell VCO to exporters. Whilst the majority of the copra is exported in small amounts are processed into coconut oil and meal in small local mills or larger mills in Honiara.

Most oil and meal produced in the local mills is used locally for soap making, fuel, livestock feed and cooking. These are general communal or family-owned operations producing around 200 litres of oil per day. Oil produced in the larger mills in Honiara is exported or used for soap making and fuel.

Oil mills are licensed by CEMA. There are three main Honiara-based copra millers, Solomon Islands Commodities Private, Solomon Tropical Products, and Coconut Bio Energy based in Noro, Western Province.

VCO is a small but growing part of this sector. There are around 40 communal or family owned VCO units using the “direct micro expeller” (DME) technology. They are almost all linked to a nucleus operator (Kokonut Pacific SI Ltd) which provides the equipment and technical support and purchases the oil, most of which is certified organic.

Most of the VCO is exported for use in cosmetics and skin-care products, massage oils etc. or as a cooking oil. The VCO units buy nuts from villagers, sort the nuts to identify those suitable for VCO and process the remainder into copra. Each VCO unit employs a team of 5-6 operators. Revenues per nut are much higher from VCO than copra and crude coconut oil manufacture.

Domestic Utilization

The domestic utilization of coconut products which includes mature nuts for cooking, green nuts for drinking, soap-making, biofuels, body lotions and massage oils, cooking, lighting, livestock feeds, and many other products.

International Utilization

The international parts of the value chain includes international traders and brokers (mostly in Asia and Northern Europe), copra millers (mostly in the Philippines), buyers of coconut oils and meals, VCO buyers (mostly in the skin-care/cosmetics business) and buyers of dry and drinking nuts.

It is common, throughout the coconut value chain, for actors to undertake multiple functions. Many growers dry their own copra, some are also village traders and some produce value added products such as VCO. The trade stores which buy copra also sell inputs such as bags, copra drying equipment and hand tools.

Exporters and oil millers have their own networks of buyers and agents in the provinces, and may also provide land and sea transport services to move coconuts and copra.

Number of Value Chain Actors

The complexity of the coconut product value chain is also reflected in the number of actors at different levels, estimated as follows:

Many of the above enterprises operate as informal (not registered legal business entity) family enterprises. This includes virtually all of the growers and most of the rural traders. The traders fall into two categories:

• Agents that are strongly linked to the higher-level actors (exporters, millers) and very dependent on the latter for commission and support, especially working capital;.
• Independent traders who sell competitively and opportunistically. Often, they have their own working capital although limited. Most also operate other rural businesses (trade stores, fuel depots etc.)