Export Competitiveness Analysis of Philippine Carrageenan Products

Purpose – The Philippines is a major player in world production and trade of seaweed and carrageenan. Refined and semi-refined carrageenan are the main seaweed exports of the country. This paper analyzed the competitiveness of Philippine carrageenan exports using time-series data from 1995 to 2019. Specifically, it described the global trends in export volume and value of carrageenan products; identified the major export destinations of Philippine carrageenan products; examined the export price and quality competitiveness of Philippine carrageenan products; identified the factors affecting the comparative advantage of Philippine carrageenan products; determined the problems related to the export competitiveness of Philippine carrageenan products; and provided policy recommendations. Design/Methodology/Approach – Descriptive analysis was used to describe the trends in the export volume and value of carrageenan products. The comparisons of quality standards for raw dried seaweeds and the carrageenan products in the Philippines are against its main competitors (i.e., People’s Republic of China and Indonesia), the Joint FAO/WHO Expert Committee on Food Additives (JECFA), and its major export destinations (i.e., the United States and the European Union). Export price ratio was used as an indicator of price competitiveness. A cross-country analysis of the revealed comparative advantage (RCA) for the carrageenan exports of the Philippines, Indonesia, and China from 1995-2019 was employed to examine export competitiveness since the RCA shows the relative advantage or disadvantage of a country to export a good. Tobit regression analysis was employed to identify the factors affecting the comparative advantage of Philippine carrageenan products. Findings – Results revealed that when compared with China and Indonesia, carrageenan exports of the Philippines were cheaper and more expensive, respectively. The country complies with the requirements set by JECFA but the United States and the European Union have more stringent quality requirements for carrageenan. The People’s Republic of China has stricter microbiological requirements for carrageenan compared to the Philippines. The quality standards for carrageenan in the Philippines and Indonesia were at par. The significant determinants of revealed comparative advantage (RCA) index of the Philippines were RCA index of Indonesia, foreign exchange rate, and per capita gross domestic product of the European Union. Carrageenan processor-exporters in the Philippines experienced competition with China-based processors for raw dried seaweed input. The competition with Indonesia is also emerging as their carrageenan processing industry starts to expand. The incidence of ice-ice disease affects the quality of seaweeds for processing. Research Implications – The study recommended to: increase local seaweed production in the Philippines and strengthen market linkage between seaweed farmers and processors; provide technical assistance to farmers in order to prevent the development of non-indigenous pests and pathogens such as ice-ice disease in aquaculture areas; inclusion of specification for metal contamination in the Philippine National Standard for dried seaweed; adopt competition-based pricing to compete with carrageenan exports from Indonesia; secure position in major export markets, namely the US, Denmark, France, and Belgium; and expand on emerging markets.