The government is setting aside P200-million budget allocation this year for the expansion of coffee plantation in the country to beef up local production and meet up the strong demand for coffee.

Pacita U. Juan, president and co-chair of the Philippine Coffee Board Inc., told reporters that the P200 million has been allocated under the 2010 budget of the Department of Agriculture.

“This P20-million budget would be for new plantings to expand the existing lands planted to coffee,” Juan said.

The P200-million fund serves as the second grant by the DA to the Coffee Board, which was granted a seed money of P50 million in 2008 for the rehabilitation of coffee farms in the country.

According to Juan, the P50 million seed grant had been used up already in the rehabilitation of at least 1,000 hectares planted to coffee and the production of four million coffee seedlings.

With the seed fund, the Coffee Board was able to reach out to coffee farms in Benguet, Bataan, Cavite, Negros Occidental, Iloilo, Cotabato and North Eastern Mindanao like Davao.

At present there are 70,000 hectares planted to coffee, but the yields are lower at 300 kilos a hectare only when a hectare of coffee, if properly maintained and cultivated, could double its yield to 600 kilos a hectare.

The domestic coffee output this year is expected to be at 23,000 metric tons only because of the El Niño or a little lower than the 25,000 MT last year. A kilo of local coffee beans can sold for P200 while roasted coffee at P400 a kilo, depending on the quality of the commodity.

Comparatively, coffee consumption in the country is placed at 65,000 MT. Local coffee consumption has been growing between 2-3 percent annually.

“This means the country is importing P3 billion worth of coffee a year to meet the local demand. So there is a need to balance between supply and demand,” she said.

Of the P3 billion coffee imports annually, Juan said, 90 percent are instant coffee and the balance is Arabica coffee bean importation from Indonesia that normally goes to the local coffee roasters.