RP to increase coal importation this year

The Philippines is expected to increase its shipments of coal this year from its traditional sources like Australia and Indonesia to prop up alternative source of fuel as part of restructuring its current power problem.

As one of the country's top sources of power, the Philippines has relied heavily on coal-fed power plants for its electricity. No doubt the country's coal importation has been on the rise since 1996 in its bid to reduce dependence on much costlier oil, which the country also imports for its power generation.

The state-owned National Power Corp. alone, which is about to be privatized, requires an average of one to two shipments from various independent suppliers of 65-75,000 tons per shipment. The power industry, which consumes 80 percent of the Philippines total coal imports, has doubled importation from 1996 at 2.99 million tons to 4.87-million tons last year, figures from Energy Department showed.

Australia and Indonesia have remained the biggest source of steam coal shipments last year at 2.26-million tons and 2.05-million tons, respectively.

The Capesize rate for coal from Queensland, Australia to the Philippines was $8 per ton. Shipping analysts said this trade pattern is now gaining momentum after Australian bidders recently lost to Indonesians of 14 Panamax cargoes of sub-bituminous steam coal for delivery to Taiwan.

Indonesia overtook Canada in 1996 to become the world's fourth largest coal exporter, and is now surging ahead of the US for third position.

Indonesian coal exports have risen steadily over the last decade, and it is now even closing in on South Africa's number two slot.

China is another country to watch, with hopes to export 50-million tons this year and to nearly double coal exports by 2004 to reach 71-million tons.

In the current freight environment, shipping analysts said, China is seen as a major competitor to the world's largest coal exporter, Australia.

Geographically it has the advantage, being well placed for the world's three largest importers: Japan, South Korea and Taiwan.