Abaca industry

CEREZO I CAUNTOY I CORTEZ

DESCRIPTION
Abaca (Musa textiles Nee) is a plant
related to banana, both belonging to the
family Musacaea. The abaca plant was
first described by Don Luis NEE (1801)
who gave the earliest confirmation that
abaca is indigenous to the Philippines.

THE ABACA IN THE PHILIPPINES

Abaca is indigenous to the Philippines and
is similar to banana in appearance except that
the leaves are upright, pointed, narrower and
more tapering than the leaves of the banana.
Abaca fiber is considered as the strongest
among natural fibers. The length of the fiber
varies from three to nine feet or more,
depending on the height of the plant and the
age of the leaf sheath. The color of the fiber
ranges from ivory white to light and dark
brown

THE ABACA IN THE PHILIPPINES

ABACA IS GROWN IN 56 PROVINCES WITH THE

FOLLOWING AS THE TOP TEN (10) PRODUCERS:

Catanduanes
Sulu
Northern Samar
Surigao del Sur
Leyte
Lanao del sur
Davao Oriental
Bukidnon
Davao del Sur
Aklan

OBJECTIVES:
To know more about Abaca Industry in the
Philippines.
Develop a flow of commodity using the
Agribusiness System Model.

Distinguish

the problems, issues and

concerns in the abaca industry.
Determine possible recommendations for
the improvement of the industry.

USES OF ABACA:
During the 19th century abaca was widely used for ships' rigging, and
pulped to make sturdy manila envelopes. Today, it is still used to make
ropes, twines, fishing lines and nets, as well as coarse cloth for
sacking.
There is also a flourishing niche market for abaca clothing, curtains,
screens and furnishings, but paper-making is currently the main use
of the fibre.
Fibercrafts - handbags, hammocks, placemats, rugs, carpets, purses
and wallets, fishnets, door mats, scrunches
Handwoven fabrics - sinamay, pinukpok, tinalak, dagmay
Sacks, hotpads, hemp coasters, Baskets lupis and bacbac* Wall paper,
wall cover.
Textile
Furniture
Others - wire insulator and cable, automobile, components/composites

USES OF ABACA:
Cordage products - ropes, twines, marine, cordage,
binders, cord
Pulp and paper manufactures tea bags,filter paper,
mimeograph stencil, base tissue, sausage skin, base
paper, coffee cup Cigarette paper, currency paper, chart,
file folders, envelops, time cards, book binders and
parchment paper Microglass air filters media, x-ray
negative, optical lens wiper, vacuum filter, oil filter
Nonwovens - medical gas masks and gowns, diapers,
hospital linens, bed sheets.
Handmade paper - paper sheets, stationeries, All
grades including wastes all-purpose cards, lamp shades,
balls, dividers, placemats, bags, photo frames and
albums, flowers, table clock

ENVIRONMENTAL BENEFITS

Erosion control and biodiversity rehabilitation

can be assisted by intercropping abaca in former
monoculture plantations and rainforest areas,
particularly with coconut palms. Planting abaca
can also minimize erosion and sedimentation
problems in coastal areas which are important
breeding places for sea fishes. The water holding
capacity of the soil will be improved and floods
and landslides will also be prevented. Abaca
waste materials are used as organic fertilizer

SECTORAL ANALYSIS

A.) INPUT SECTOR

LAND
Time of Planting
-Abaca usually planted at the start of the rainy
season
-Planting can be done anytime if there will be no
distinct wet and dry season
SEEDS
FERTILIZERS
-In old abaca plantation, apply fertilizer once
before and after rainy season at 8 bags per
hectare (4 Urea and 4 complete).

B. FARM SECTOR
*Farmers
As of 2008, there were 25,875 abaca farmers
cultivating a total area of 46,861.12 hectares or
an average of 1.8 hectares per farmer
*Seed planting
- time of planting
- methods of planting

B. FARM SECTOR
*Harvesting
-stalks are harvested three to five months before the
flagleaf appears. Abaca growth has been observed
to slow down a few months before flagleaf
appearance. The practice in the region is to
harvest abaca twice a year. A longer interval may
result in overmatured stalks which consequently
yields fibers of low quantity and poor quality.
Three steps are involved in the harvesting of
abaca, the cleaning, topping and tumbling.
*Storage
*Maintenance

PRODUCTION
During the decade, Eastern Visayas remained as the top
abaca-producing region, contributing an average of 23,564 mt
or 35.9% to the annual average production.
Bicol followed with an annual average of 19,670 mt or 29.9%
share
Davao Region, which supplied 13.4% or 8,783 mt, ranked
third during the ten-year period under review.
Starting 2009, Bicol emerged as the biggest producer of
abaca, outranking Eastern Visayas which abaca areas were
badly affected by viral diseases such as bunchy top, mosaic
and bract mosaic.
Volume of production is 69,802 mt in 2006.
Area fluctuated from 112,456 ha to 135,883 ha (1997 to 2006)
It has a ten-year national average yield of 0.61 t/ha (1997 to
2006) t/ha

PROCESSING SECTOR
Primary Processing.
After harvesting (tumbling), primary processing is
undertaken to produce abaca fiber. This entails additional
cost of P7.00 per kilogram fiber attributed to tuxying,
stripping, drying and bundling. This is commonly incurred by
the harvesters/strippers
From the farm, the harvesters/strippers shoulder the cost of
handling from the farm to the roadside (P0.33 per kilogram),
fifty percent of the transport cost from the roadside to trader
(P0.25 per kilogram) and the cost attributed to reseko
P1.50 per kilo which is 5% of the total weight of dried fiber.
All in all, the harvesters/strippers incurred P2.08 logistics
cost and together with the depreciation cost of farm
implements/tools (P0.25 per kilogram), harvesters/strippers
incur an average cost of P16.58 per kilogram dried fiber.

PROCESSING SECTOR
The abaca fiber is extracted from the stalk of the plant
scientifically known as Musa textilisNee, specifically from
the outer covering of the leaf sheath. It is considered the
strongest of natural fibers being three times stronger than
cotton and two times stronger than sisal fibers. Abaca is
far more resistant to salt water decomposition than most
of the vegetable fibers, making it suitable for rope and
cordage manufacture.
Considering its prime qualities, abaca is also an excellent
choice over other natural fibers for producing thin papers
of high porosity and high strength. Abaca can also
substitute for wood pulp in the manufacture of a general
line of paper products, a usage that could contribute
immensely to the conservation of the worlds diminishing
forest resources.

PROCESSING SECTOR
The Abaca pulp is initially porous. Its
porosity is modified by our manufacturing
process depending on the final paper product
to be made. All these properties contribute to
abaca pulps suitability for the manufacture of
specialty papers, such ascurrency or bank
notes, electrolytic condenser papers, filter
papers, tea bags, meat casings,
disposables, cigarette paperand nonwovens, among others. Likewise abaca pulp is
being used for strengthening facial tissues,
table napkins, diapers and recycled papers.

PROCESSING SECTOR
Abaca Cordage and Allied Products From 2003 through
2012, foreign trade of abaca cordage and allied products
such as ropes, cables and twines averaged 7,246 mt per
year and increasing, although at a minimal rate of 0.3%
annually. The stiff competition posed by cordage
products made of synthetics and other cheaper natural
materials continued to cause setback to the countrys
abaca cordage industry. The United States absorbed the
bulk of the exports accounting for 64.3% or an average of
4,662 mt to the annual average. Singapore, Canada, the
United Arab Emirates, the United Kingdom, Germany,
Malaysia and Australia consistently remained as the
other major markets for Philippine cordage.

PRODUCTS OF ABACA

PRODUCTS OF ABACA

MARKETING SECTOR
Marketing Flow
Marketing is done at different levels depending on the
location of the farmers and where the accumulation
of fiber is done. In Bicol area, more particularly in the
Province of Albay, fiber trading starts at the village
level, the pricing system includes mark-up
attributable to the service provided by the traders.
From the farm, abaca fibers could either be sold to
multi-purpose cooperatives or barangay buyers
stationed in the area. Barangay buyers are usually
buying stations of established town buyers which in
turn sell abaca fibers either to exporters, processors
or fibercraft manufacturers.

MARKETING SECTOR
Farmers

Farmers usually sell their fibers to barangay buyers, to

multipurpose cooperative or directly to town buyers regardless of
the grades or what they term as all in basis. Farmers are pricetakers. They just accept prices offered by barangay or town
buyers, which dictate the value of the fiber depending on the
prevailing price. They produce depending on what they can only
harvest from the farm and not on the market demand.

Barangay Buyers or Multipurpose Cooperatives

The barangay buyers and multipurpose cooperatives, at the

same time assemblers, are the direct market of the abaca fibers.
Multi-purpose cooperative in the area offers benefits to its
farmer-members since they usually make efforts of proposing
projects to the government such as mechanized decorticating
machines available for use for its members. They can opt to go
directly to processors or still have to pass to town buyers.

MARKETING SECTOR
Town Buyer
They source out the abaca fibers either from barangay
buyers or multipurpose cooperatives then sell the abaca
fibers directly to processors.
Fiber Exporters
The fiber exporters also known as grading and baling
establishments (GBEs) operate in the region specifically
in the province of Albay. These establishments employ
fiber classifiers who ensure that the classified fibers are
in accordance with government standards. They
likewise operate pressing machines for baling of fibers
intended for trading in both domestic and international
market. The standard bale of fiber is equivalent to 125
kilograms and measures about 100 cm x 55 cm x 60 cm

MARKETING SECTOR
Marketing.

The traders, on the otherhand, shouldered the remaining

fifty percent of the transport cost from the roadside to the
trader (P0.25 per kilogram). In addition, additional cost
related to payment for the driver and fuel (P0.02 and
P0.06, respectively) and labor costs in reclassifying,
bundling and handling (P0.56 per kilogram) brings the
total cost incurred by the trader to P0.81 per
kilogram).Overall, including the cost of buying a kilogram
of dried fiber at P30.00 per kilogram, the trader incurred
P30.81 per kilogram of dried abaca fiber. At an average
selling price of P39.00 per kilogram, the traders profit
margin is P8.19 per kilogram of dried fiber.The logistics
cost of P0.08 per kilogram dried fiber, (delivery cost from
trader to exporter) is reimbursed by the exporter.

FOREIGN TRADE/EXPORT

Export of abaca is in the form of raw fiber and

manufactures. For the period 2001-2006, total
export earnings averages at US$78.186,218 an
average growth rate per annum of 4.9 percent.
The year 2006, registered the highest export
earnings of US$90,681,106.The major countries
of destination are the United States, United
Kingdom, Germany, Canada, Netherlands,
France, Japan, India, Malaysia, China, Taiwan
and others

IMPORTS

The Philippines, specifically the abaca pulp

sector, imported an average of 307 mt of abaca
fiber from Ecuador during the last ten years
except in 2005, when the sector was able to
absorb the biggest bulk (44,470 mt or 60.2%) of
the countrys total fiber output of 73,875 mt
during the said period.

SUPPORT SECTORS
DEPARTMENT OF AGRICULTURE (DOA)
PRESIDENTIAL DECREE No. 1208 (1977).
Two cooperatives in Bicol are benefiting from a project titled, "Enhancing the Productivity of Abaca
Farms in the Bicol Region through Integrated Farming System: The Abakayamanan Program",
being implemented by the Department of Agriculture-Fiber Industry Development (DA-FIDA) in
Region 5. It is funded by the Bureau of Agricultural Research (BAR) and the National Agriculture
and Fisheries Council (NAFC) through the Japan Official Development Assistance's (ODA) - KR2
Program Grant Assistance for Underprivileged Farmers .
GAGC(Gubat Abaca Growers Cooperative)
MAPA(Malilipot Abaca Planters Association)
PHilMech(Philippine Center for Postharvest Development and
Mechanization )
FIDA provided technical assistance to the abaca farmers of Palawan through
its fiber development officer, Rey Mangaccat, 50, now a permanent resident
of Puerto Princesa City, Palawan. Mr. Rey is FIDA extensionist, regulatory
officer and marketing officer rolled into one. He moved north to south of
Palawan using his motorcycle to help abaca farmers-- encouraging them to
plant more abaca and when time is ripe providing them marketing
assistance.

ISSUES
Farm Sector

Low farm productivity

Presence of viral diseases (mosaic, bunchy top, bract mosaic)
Insufficient postharvest facilities like dryers, stripping machines and stripping sheds
Insufficient disease-free planting materials
Stringent requirement of financing windows
Production of low quality fiber
Limitation of land ownership imposed by Comprehensive Agrarian Reform Program
(CARP) also limits expansion of areas by big land owners

Processing Sector

Insufficient supply of the required grades

Lack of initiative in promoting contract growing

Marketing Sector

Several tiers of marketing channels

Lack of collective marketing system by farmers
Lack of funds for the promotion of products especially in the international market
Difficulty of transporting fibers resulting to high transport cost

MARKET OPPORTUNITIES/PROSPECTS AND

DEVELOPMENTS
"Go natural, Go Green is the Order of the Day
The advocacy on going natural, going green is becoming more
intense with the growing
awareness and concern to care for and protect the environment.
From a host of industrial products to home furnishings and
housewares, fashion and its accessories to packaging of food,
apparels and other items, eco-friendly materials like abaca are in
greater need and importance.
The Montreal Protocol and Kyoto Protocol were signed which
practically imposed on participating countries the use of
biodegradable materials to protect ozone layer and tackle the issue of
global warming and greenhouse gas emission.
Abaca as a renewable resource, according to FAO, can be an
excellent part of the overall solution to climate change as the plant
absorbs more carbon dioxide than its emission and is hundred
percent biodegradable that cannot harm the environment.

FIDAS PROGRAMS/PROJECTS

On the production side, FIDA has been continuously implementing

programs/projects geared towards increased production of quality abaca fiber
such as:
Goal I or Abaca Expansion Program is aimed at establishing new agribusiness
lands and generating employment which started in 2005. By the end of 2012, a
total of 57,472 hectares new abaca plantations have been established bringing
the overall hectarage to 176,793 hectares.
Abaca Rehabilitation involves the rehabilitation of diseased and typhoondamaged abaca plantations aimed at increasing abaca farm productivity.
Disease Eradication is aimed at eradicating abaca mosaic, bract mosaic and
bunchy top, the three viral diseases which affect the abaca plantations in Bicol
and Eastern Visayas. It is also aimed to prevent and control the spread of the
diseases in the healthy adjacent plantations.
Abaca Planting Materials Production is being implemented to support the
planting material requirements of farmers for the expansion and
rehabilitation of abaca plantation.
Mechanization of Abaca Fiber Extraction
R and D on crop protection, crop production and crop improvement and fiber
processing

FIDAS PROGRAMS/PROJECTS
On the marketing side, FIDA is committed at sustaining and enhancing
the demand for abaca and fiber-based products in both the domestic and
international communities. The major thrusts that are continuously being
undertaken by the Authority are the following:
Trade Promotion- is aimed to expand the market base for the Philippine
abaca industry through participation in local and international trade
fairs/exhibits, multi-media promotions, fashion shows and other marketrelated events.
Market Information Exchange and Dissemination- is aimed to keep FIDA
and other concerned government and private entities/individuals abreast
of industry developments, issues and concerns, including trade
possibilities in the global market.
Market/Institutional Linkages are done through the conduct of the
following: 1) facilitating/establishing direct market linkages among fiber
producers, processors and end- users to ensure stable and more regular
markets and better prices for producers and more stable supplies for
manufacturers/processors and end-users, and 2) initiating and
strengthening direct linkages with other concerned/relevant institutions to
expand trade for Philippine abaca fiber and manufactures.

FIDAS PROGRAMS/PROJECTS
In support of the above, FIDA undertakes the following activities:
- Networking with Philippine embassies based in foreign countries,
particularly with agricultural and commercial attaches to identify
prospective buyers and/or interested investors on abaca and manufactures
-Coordination with foreign embassies and other relevant international
organizations for pertinent information on market opportunities as well as
inquirie s
-Coordination with trade promotion agencies like DTI-CITEM,, business
organizations and other similar entities for the wider promotion of the
abaca industry
-Market referrals or responses to inquiries of industry clientele for market
assistance especially on suppliers/prospective buyers of abaca fiber and
manufactures for possible market tie-ups
-Arrangement of meetings between and among prospective buyers and
suppliers and manufacturers for possible trade negotiations/tie-ups
-Continuing activities in developing/strengthening entrepreneurial
capabilities of abaca farmers.

CONCLUSIONS AND
RECOMMENDATIONS
The following are the areas that need improvement in the supply/value chain system of abaca
in Bicol region:
Input Supply. Majority of the abaca planted in the region is the Lausigon variety with an
average yield of 600 to 700 kilograms dried fiber per year. However, there are available high
yielding and disease resistant varieties of abaca with a potential yield of 1,600 kilograms of
dried fiber per year. Farmers/owners should consider investing in the replacement of old,
unproductive and disease infected plants with these high yielding varieties to improve yield.
Production. The abaca industry in the region suffers from low productivity, thus,
improvement in the productivity of the abaca farms should be considered. The average yield
in the region is only 600 kilograms dried fiber which is lower than the national annual
average of 700 kilograms and the potential yield of 1,600 kilograms per year. Increase in the
productivity could be attained thru use of high yielding varieties, proper fertilization (12 bags
per year), pest management strategies and appropriate culture and management practices
(i.e. proper population density, organic-inorganic fertilization, etc.).
Processing. In the farm level, only primary processing (fiber extraction) is undertaken.
Improvement in the processing subsector could be attained thru mechanization in fiber
extraction to improve fiber recovery from the existing 1.4% to 1.5%. In addition,
mechanization will lessen labor cost and improve the quality of fibers recovered resulting to
higher fiber prices.
To increase income thru processing, cooperatives should diversify their business (forward and
backward integration) and venture into processing machinery rental business, providing
short term loans to members (agricultural inputs) and value-adding (fibercraft
manufacturing) activities.

CONCLUSIONS AND
RECOMMENDATIONS

Marketing. The marketing of abaca fiber in the region is multi-layered,

complex and costly. Community-based buyers such as multi-purpose
cooperatives should intensify their effort for collective marketing in
order to command a better price for the farmers products.
In addition, the cooperatives, if they met the required volume, could deal
directly with the exporters and processors and avail of the higher price
and additional incentives offered by the exporters. Multi-purpose
cooperatives could venture into fiber classifying to be able to avail of the
higher price of different fiber grades.
Logistics. The distance of the farms to the town traders, exporters and
processors drives logistics costs up. This is in addition to the poor state
of farm to market roads in the countryside particularly in Bicol region.
Reduction in transportation and delivery costs could be attained thru
the provision of hauling/delivery vehicles and storage/classifying
buildings to cooperatives. In addition, the existing arrangement with the
buyers to shoulder majority of the logistics (transportation) costs
incurred should be maintained.