Shemberg had to shut down its carrageenan production for at least 10 days in February due to lack of seaweed supply even as production of many agricultural goods worldwide has been generally declining.

For seaweed, main reasons for reduced production are low-yielding crops and high levels of contaminants in dried seaweed. The increased demand for carrageenan globally, both refined and semi-refined, has also heightened the shortage situation for the raw material.

However, another major factor in the operational shutdown of several carrageenan producers that is now also affecting Shemberg, is peso’s present level which is at a 10-year high at P41 to P42 to $ 1 from P54 to P55.

"The Philippine peso’s strength has made Indonesian seaweed more competitive. Seaweed harvesters sell their raw material in peso and carrageenan producers sell their finished product in US dollars. This plight of Philippine seaweed farming affects close to 100,000 farmers and harvesters," according to an industry report.

Indonesia is a source of seaweed for some Philippine carrageenan processors. While Philippine cottonii is at $ 1,600 per metric ton (MT) from last year’s $ 800 per MT, Indonesian cottonii is only at $ 1,400 per MT from last year’s $ 600.

Shemberg had earlier warned that the country’s carrageenan industry is bound to take significant losses that can cause a collapse of the industry due to the peso’s instability. Several other local carrageenan processors had earlier closed their operations.

The price of seaweed variety cottonii in the country is now at an all-time high of P50 per kilo and at its dry form, P60 per kilo. But there is no more volume to produce for which farmers can take advantage of any increased profit.