Implementing Rules and Regulations of the Revised Price Adjustment Scale for Moisture Content in Copra

July 8, 2003

PCA ADMINISTRATIVE ORDER NO. 02-03

IMPLEMENTING RULES AND REGULATIONS OF THE REVISED PRICE ADJUSTMENT SCALE FOR MOISTURE CONTENT IN COPRA

SECTION 1. Rationale. — The threat of aflatoxin contamination and undesirable substances in copra and copra meal has been a continuing concern of both producers and end users. To mitigate the problem, the Philippine Coconut Authority promulgated Administrative Order No. 01, Series of 1991, otherwise known as the New Copra Classification Standards, in conjunction with its copra quality improvement program to prevent the occurrence of harmful Aflatoxin naturally arising from molds in improperly dried copra.

During the implementation of Administrative Order No. 01, Aflatoxin was controlled down to the range of 50 to 100 parts per billion (ppb) in copra products, which have been exported to and accepted by buyers in Europe at discounts.

Recently, the European Community issued EC Directive 2002/32/EC, setting at 20 ppb the lowest and maximum tolerance limit for Aflatoxin B1 in copra meal used as feed ingredient, which restriction, the member countries have adopted beginning May 1, 2003 and to be uniformly enforced by the member countries effective on August 1, 2003.

To meet the requirement of the EC Directive, and to further promote the quality and marketability of Philippine coconut oil and copra that is consistent with prevailing market prices, there is an urgent need to review and amend certain provisions of Administrative Order No. 01, series of 1991.

SECTION 2. Legal Mandate. — Considering the foregoing rationale, the Philippine Coconut Authority hereby exercises its function under Article II, Section 3 (i) of Presidential Decree No. 1468 to devise and prescribe by means of rules and regulations a method of measuring the moisture content of copra at first domestic sale and a scale of deduction according to the percentage of the moisture content.

SECTION 3. Coverage. — These rules and regulations shall cover all copra traded in the first domestic sale and subsequent transactions by coconut farmers and their cooperatives/organizations, copra dealers/traders, copra exporters, oil millers including their buying stations and their agents, for direct use or processing into other products intended for domestic use or for export.

SECTION 4. Moisture Content. — Unless otherwise revised or amended by the Authority, the following rules shall govern the treatment of moisture content in copra:

A) The base, traded, or "on-the-spot" price of copra at the mill or farm gate shall apply to the weight of copra net of the moisture content determined by the equivalent percentage of deduction prescribed in Table 1 of this Order.

B) No equivalent percentage deduction or discount shall apply to traded copra resecada/bodega with moisture at equilibrium level of six percent (6%).

C) The deductions or discounts prescribed in Table 1 of this Order for moisture in excess of the equilibrium level shall be applied within the moisture range from Six and One Tenth percent (6.1%) up to Thirteen and Nine Tenth percent (13.9%).

D) Similar deduction shall likewise be applied for copra with moisture below Six percent (6%) or within the moisture range of Five and Nine Tenth percent (5.9%) down to Five percent (5%) to discourage over drying or long storage that results in the increase of undesirable free fatty acid in copra. SIcCTD

E. Copra with moisture content of Fourteen percent (14%) and above shall be deemed non-merchantable for purposes of export or processing to other by-products for human consumption and shall be rejected by copra buyers, traders, dealers, exporters and millers and buying stations.

SECTION 5. Moisture Test. — All copra traded under these rules shall be tested and determined for its moisture content.

A) Copra dealers/traders, copra exporters and oil millers trading in quantities of 500 kilograms or more shall test and measure the moisture content of their copra purchases with the use of the Brown-Duvel method or its equivalent.

B) Those trading in quantities less than 500 kilograms shall measure the moisture content with the use of appropriate and calibrated copra moisture meter duly registered with the nearest Provincial Office of the Philippine Coconut Authority.

Registrants of moisture meters shall pay a registration fee of P250.00 per unit, which registration shall be renewed every year while the meter is in use in the trading of copra.

C) In the absence of the appropriate moisture meter device, the moisture in traded copra of less than 500 kilogram may be estimated through the traditional "break" method, provided that the testing shall be done in the presence of and to be observed by the seller.

D) For purposes of paragraphs A and B, copra dealers, traders, copra exporters and oil millers shall certify to the nearest Provincial Office the names of their authorized moisture test technicians who shall perform the sampling and testing of copra.

SECTION 6. The "Pasa" System. — The indiscriminate application of the "pasa" system wherein moisture content and deduction therefrom are arbitrarily determined as consideration for the purchase and delivery of copra shall be avoided; thus, copra buyers shall not apply any deductions for copra with moisture exceeding 14%, which the buyer, under Section 4 (E) of this rule, shall have the option to reject.

SECTION 7. Aflatoxin Related Mold. — Copra traded under these rules shall be free from excessive contaminating molds and shall be classified into grades based on the presence of yellow-green mold together with penetrating mold, otherwise known as Aflatoxin Related Mold (ARM), causing indentations or holes on the surface of the copra that are visibly seen on the cross section of a split copra. The grading shall be based on the presence and percentage of Aflatoxin Related Mold (ARM) with the corresponding premiums and deductions as provided in Table 2 of this Order.

Considering the high risk of Aflatoxin contamination, poor oil recovery and free fatty acid caused by Aflatoxin Related Mold (ARM), copra with more than 20% ARM shall be rejected.

SECTION 8. Inferior Copra. — The grades, associated price adjustments and rejection level for inferior copra are provided in Table 3 of this Order.

SECTION 9. Dust and Foreign Matter. — Any copra delivery containing dust, dirt and other foreign matter shall be discounted at the rate of one percent (1%) for every one percent (1%) of dust/foreign matter.

The determination of the weight of dust/foreign matter shall be subject to the mutual agreement of buyer and seller.

SECTION 10. Sampling Procedure. — For purposes of determining and measuring moisture content, inferiority of copra, the extent of Aflatoxin Related Mold, dust, dirt, and foreign matters in copra, the sampling procedures prescribed in Annexes 1, 2 and Table E of Administrative Order No. 001, series of 1991, which are hereby incorporated as Annexes A, B and C, respectively and forming part of these rules and regulations, shall be applied to the extent practicable.

SECTION 11. Preventive Measures to Control Yellow-Green Mold. — Due to the high risk and deterioration associated with Aflatoxin Related Mold, farmers, traders and copra buyers shall observe the following precautions:

1. Farmers must examine their copra prior to delivery to the primary trader and remove any copra seen to contain the yellow-green aflatoxin-forming mold. Such contaminated copra should be destroyed.

2. Primary traders shall examine all purchases of copra and reject any individual copra cups or pieces found to contain the aflatoxin-forming mold. Such contaminated copra should be destroyed.

3. Copra buyers, dealers and traders are required to have the necessary facilities for the immediate redrying of copra in order to prevent the occurrence or growth of Aflatoxin-Related Mold.

SECTION 12. Information Campaign. — (1) To ensure the effective dissemination of this Administrative Order, PCA, through its Regional & Provincial Offices, shall mount an information campaign after fifteen (15) days from the date of publication of this Order in a national newspaper of general circulation.

2. The PCA Regional and Provincial offices shall enlist the participation of the farmers organization at the barangay level, which shall be the primary forum of the information campaign. HcaATE

3. Copra dealers, traders, exporters and buyers as well as oil millers and their buying agents/stations shall undertake complementary information campaign efforts through the posting in conspicuous places in their offices or places of business, copies (in original English and in the local dialect of their region) of this Order within fifteen (15) days from date of aforementioned publication. Failure to do so shall be construed as a violation of this Order.

SECTION 13. Banned Copra. — Copra with moisture content of 14% and above are banned and considered non-merchantable. Copra buyers, traders, dealers, exporters or millers are prohibited from storing such copra in their bodegas or warehouses and trading of the same.

SECTION 14. Enforcement and Monitoring. — The Regional and Provincial field units of the PCA shall be primarily responsible in the enforcement/implementation and monitoring of compliance or violations of these rules and regulations in their respective operational jurisdictions.

SECTION 15. Inspection and Notice to Re-dry. — (1) Upon verified information of any non-compliance or violation of these rules, the regulatory officer of the Central, Regional or Provincial Office duly designated and authorized by the Administrator of the Philippine Coconut Authority shall visit and enter any warehouse, bodega or storage facility of any buyer, trader, or dealer, including vehicles by land, sea or air, and inspect any copra kept, stored or transported thereby in violation of the provisions of these rules.

2. After such inspection, the official authorized under this Section shall ascertain the condition of the copra and if confirmed to be those classified as banned or subject of rejection, the officer shall make a written report of such condition and notify the buyer, trader, dealer, who traded or otherwise owns the copra in writing, of the immediate need to re-dry the copra at the latter's own account and facility as provided in Section 11, paragraph 3 of this Order.

 

3. Should the buyer, trader, dealer or owner of stored copra fail to redry the copra as prescribed in the preceding paragraph within forty-eight (48) hours from receipt of the notice, the PCA Regional Manager shall immediately notify the oil millers, refiners, exporters, and other end users of copra located within his jurisdiction, providing them copies of the inspection reports and notices issued thereby and shall certify that the copra is banned, non merchantable and should be rejected.

4. The Administrator of the Philippine Coconut Authority may request any law-enforcing officer to assist the regulatory officers of the Authority in enforcing the provisions of this Section.

SECTION 16. Penalty. — Any violation or circumvention of the provisions of this Order including guidelines and directives issued pursuant thereto shall be subject to any one or more of the following administrative sanctions:

1. Non-processing of export application, non-issuance of export clearance and/or loading permit of copra for export.

2. Cancellation/suspension of the Certificate of Registration.

SECTION 17. Transition Period. — To afford all persons and entities affected by this Order ample time towards its compliance, a transition period of six months from date of effectivity hereof, inclusive of the period for the information campaign shall be observed preparatory to the full enforcement of this Order.

SECTION 18. Repealing Clause. — All orders, rules and regulations inconsistent with the foregoing provisions are hereby modified or superseded accordingly.

SECTION 19. Effectivity. — Subject to the transition period herein provided, this Order shall take effect after fifteen (15) days from date of publication.

(SGD.) DANILO M. CORONACION

Administrator

TABLE 1
COPRA MOISTURE DISCOUNT TABLE
Moisture	Discount	Moisture	Discount	Moisture	Discount
Content  (%)	(%)	Content (%)	(%)	Content (%)	(%)
5.0	2.0	8.0	2.0	11.0	5.8
5.1	1.8	8.1	2.1	11.1	6.0
5.2	1.6	8.2	2.2	11.2	6.1
5.3	1.4	8.3	2.3	11.3	6.2
5.4	1.2	8.4	2.4	11.4	6.3
5.5	1.0	8.5	2.6	11.5	6.4
5.6	0.8	8.6	2.7	11.6	6.5
5.7	0.6	8.7	2.8	11.7	6.6
5.8	0.4	8.8	2.9	11.8	6.7
5.9	0.2	8.9	3.0	11.9	6.8
6.0	0.0	9.0	3.1	12.0	7.0
6.1	0.1	9.1	3.4	12.1	7.2
6.2	0.2	9.2	3.6	12.2	7.4
6.3	0.3	9.3	3.7	12.3	7.6
6.4	0.4	9.4	3.8	12.4	7.8
6.5	0.5	9.5	3.9	12.5	8.0
6.6	0.6	9.6	4.0	12.6	8.2
6.7	0.7	9.7	4.1	12.7	8.4
6.8	0.8	9.8	4.2	12.8	8.6
6.9	0.9	9.9	4.3	12.9	8.8
7.0	1.0	10.0	4.7	13.0	9.0
7.1	1.1	10.1	4.8	13.1	9.2
7.2	1.2	10.2	4.9	13.2	9.4
7.3	1.3	10.3	5.0	13.3	9.6
7.4	1.4	10.4	5.1	13.4	9.8
7.5	1.5	10.5	5.2	13.5	10.0
7.6	1.6	10.6	5.3	13.6	10.2
7.7	1.7	10.7	5.4	13.7	10.4
7.8	1.8	10.8	5.5	13.8	10.6
7.9	1.9	10.9	5.6	13.9	10.8
				14.0	Reject

TABLE 2
GRADES, PREMIUMS and DISCOUNTS for
AFLATOXIN RELATED MOLD in COPRA
GRADE	AFLATOXIN-RELATED MOLD	Premium/Discount (%)
A	0.0	+1.0
B	1 - 10%	-1.0
C	11 - 20%	-2.0
	more than 20%	Reject

TABLE 3
GRADES and DISCOUNTS FOR INFERIOR COPRA
GRADE	INFERIOR COPRA	Discount (%)
	A	0.0	0.0
	B	1 - 10%	-1.0
	C	11 - 20%	-2.0
		more than 20%	Reject

TABLE 4

DISCOUNTS FOR FOREIGN MATTER

Discounts shall be at the rate of 1% for every 1% of foreign matter.

"ANNEX A"

"ANNEX 1"

(To PCA Administrative Order No. 001-A Series of 1991)

DETERMINATION OF MOISTURE IN COPRA

SECTION 1. Sampling. — This should be undertaken in the presence of the supplier. Sampling should be carried out using a 3/8" diameter steel spear. When handling deliveries in sacks, samples should be taken through the sack wall prior to emptying. Samples should be taken evenly throughout the unloading such that the total accumulated weight is at least 250 grams. When handling loose copra from trucks, samples should be taken at random throughout the unloading operation to give a total sample of at least 250 grams.

The sampling rate for large quantities of copra being unloaded on conveyors from ships should be at least 250 grams per 20 tons of copra. Such samples may be combined and sub-sampled for moisture analysis. The number of analyses carried out should be agreed between the buyer and the seller.

After collection, all samples should be well mixed and transferred to airtight containers.

SECTION 2. The Brown-Duvel Method of Determination of Moisture in Copra.

A. Laboratory Equipment

1/Brown-Duvel Moisture Tester (preferably electrically operated).

2/Distilling flask,1,000 ml. capacity, glass Pyrex brand.

3/Thistle tube, 350 mm. long, glass.

4/Graduated cylinder, 25 ml. Cap., with 1 ml. Units.

5/Thermometer, 0-250 degrees C range, with 1°C graduation.

6/Funnel, 15 cm. diameter, plastic or aluminum.

7/Beaker, 250-ml. capacity.

8/Dust separator, locally fabricated 5 mesh.

9/Strainer, ordinary, 15 cm. diameter, mesh.

10/Balance, accurate to plus or minus 0.2 grams.

B. Heat Transfer Oil:

The oil used must be moisture free.

1/Capella Oil (Caltex)

2/Vetria Oil (Shell)

3/Univolt 60 (Petron)

4/Refined and deodorized coconut oil

C. Procedure:

1/The final representative copra sample is mixed and placed in a mesh, locally fabricated dust separator where small pieces of copra, dust and foreign materials are removed.

2/Check the weighing balance and set it to zero every time it is used.

3/Weigh accurately one hundred grams of representative copra sample and with the aid of an aluminum or plastic funnel, transfer the weighed sample into a clean, dry, 1,000-ml. distilling flask.

4/Measure 150 ml. of oil in a 250 ml. beaker and slowly pour into the distilling flask.

5/Allow the oil to settle by gently shaking the flask to attain a uniform level, then cover the flask with a tight-fitting rubber stopper with an inserted thermometer tip that is just touching the oil inside the flask.

6/Open the water inlet in the condenser. If the water in the condenser is not continuously flowing, take note that it is always cold and at a level just below the thistle tube brim.

7/Place the flask on a closed heater then turn the switch on. Take note that the boiling flask stem is slightly inclined towards the condenser and properly fitted to the thistle tube.

8/Put a 25 ml. graduated cylinder below the thistle tube, as a receiver of the moisture condensate.

9/Heat the contents of the flask until the temperature reaches 200 °C. The heating time should be 15 +/-2 minutes.

10/Allow the contents to cool until the thermometer reading reaches 160 °C.

11/Disconnect the flask from the condenser.

12/Remove the graduated cylinder from the thistle tube stem taking care that the last drop of moisture condensate fall inside the cylinder.

13/Read the moisture content directly from the cylinder, disregarding the dark liquid portion on top. The cylinder should be at eye level when taking the reading and the lower meniscus of the liquid viewed.

D. Guidelines on Moisture Re-test:

Should the buyer undertake a re-test the following guidelines are suggested:

1/No adjustment on moisture reading shall be made if variance between original and re-test is +/-0.2% or less;

2/If moisture reading variance is more than +/-0.2%, the average of the original and re-test results shall be taken as final reading.

3/No re-test shall be entertained after 24 hours from sampling. time.

"ANNEX B"

"ANNEX 2"

(To PCA Administrative Order No. 001-A Series of 1991)

COPRA QUALITY ASSESSMENT

1. General Guidelines

1.1 The sampling and classification shall be carried out in the presence of the supplier or his representative, if he so desires.

1.2 A visual classifier should be appointed who will:

a/Check the sampling activity with respect to sample quality and representation;

b/Undertake the quality assessment; and

c/Provide the supplier with the results of the quality assessment and payment calculation. If requested, he should also provide, at cost price, a 4.5 kg. representative sample for reference purposes.

2. Guidelines in Copra Sampling

2.1 The weight of copra delivered is first estimated.

2.2 Sampling shall be done while copra is being unloaded from trucks, boats or conveyors.

2.3 Sampling shall be done in the presence of the seller or his representative.

2.4 Samples for physical properties evaluation shall weigh a minimum of 9 kg. and be obtained through the use of shovel. The shovel should have dimensions approximately 30 cm. x 30 cm.. Such a shovel will take a sample of about 1.5 kg. copra.

2.5 When handling sacks, sample a number of sacks in each lot equal to the integral part of the square root of the total number of bags.

Example:

If there are 38 sacks (square root=6.16) sample 6 sacks. If there are 105 sacks (square root=10.25) sample 10 sacks.

Take the sample evenly over the delivery. The sampling rate over a range of 1 to 400 sacks is given in Table E attached to this Annex. Table E also gives a guide on the weight of sample to be removed from each sack. This has been computed so as to give a minimum total sample weight of 9 kg. When handling loose copra, the total delivery weight (estimated if necessary) should be converted to the equivalent number of sacks taking a conversion rate of 50 kg. copra per sack. The total number of samples to be taken and the weight of each sample is obtained by reference to Table E.

2.6 Copra on a conveyor should be sampled on a regular time interval which should be pre calculated in order to arrive at the required total sample weight.

2.7 When sampling from a heap of copra, the required number of samples should be taken from the different sides and as far as possible at different depths within the heap.

3. Sample Evaluation

It is very important that these operations be carried out in good lighting conditions.

The whole of the sample, minimum weight of 9 kg., is used for Evaluation 3.1. For Evaluation 3.2, 3.3, and 3.4 a sub-sample is used and this is obtained by cone-and-quartering as follows: The whole sample is piled on the floor and is well mixed with a shovel. The pile is then divided into 4 equal parts and opposite quarters are taken as the sub-sample. The sub-sample must weigh between 4.5 kg. and 5.0 kg and if it exceeds this the desired weight should be obtained by further cone-and-quartering.

 

3.1 Dust/Small Copra Pieces/Foreign Matter Content;

In the absence of any built-in dust separator system in the copra handling system, dust content may be determined as follows: The sample taken (minimum 9 kg.) is collected in a clean dry container and weighed. The total sample is then transferred to a suitable sieve fitted within 4 mesh screen. The sieve is then shaken until it is judged that the bulk of the dust has passed through. The bulk copra sample is then examined and any foreign matter (shell, string etc.) removed and added to the dust. The dust and foreign matter is then weighed on a balance having at least 10 gms. weighing divisions. Calculate as follows:

               Wt. of dust/foreign matter (g) x 100

%     =        ——————————————

                  Total sample weight (kg) x 1000

This deduction may also be taken as a fixed figure subject to the mutual agreement of buyer and seller.

3.2 Inferior Copra

The sub-sample, which should weigh in order of 4.5 to 5.0 kgs., is placed on a clean surface and copra goma and any burnt copra is removed. Calculate the percentage inferior copra as follows:

                                         Wt. of inferior copra (kg) x 100

% Inferior Copra      =         —————————————

                                               Sub-sample weight (kg)

After the examination, return the inferior copra to the residual copra to remake the original sample.

3.3 Yellow-Green Mold

Any copra containing the yellow-green aflatoxin forming mold -Aspergillus flavus- should be removed and weighed.

                                                   Wt. of yellow-green copra (kg) x 100

% Yellow-Green Mold      =           ————————————————

                                                             Sub-sample weight (kg)

After the examination this copra should not be returned to the original sample.

Note: Even a small area of yellow-green mold is sufficient to classify the whole piece of copra

3.4 Penetrating Mold

This is taken to be any copra in which mold has penetrated the surface. Sometimes it is necessary to break copra in order to see the penetration.

Copra showing clear signs of mold penetration is sorted-out from the residual sample from 3.3 above, after the yellow-green mold has been removed. Copra that does not fall clearly into the penetrating mold classification should also be separated. The latter is divided equally and half is added to the penetrating mold category. Weigh the copra showing mold penetration and calculate as follows:

                                                Wt. of penetrated copra (kg) x 100

% Penetrating Mold       =            ——————————————

                                                          Sub-sample weight (kg)

3.5 Aflatoxin Related Mold (ARM) for Grading Copra.

ARM % = Yellow-Green Mold % + Penetrating Mold %

Note:Mold other than the yellow-green mold and the penetrating mold do not contribute to the percentage mold used for grading copra.

3.6 Reporting Results and Payment Calculation

Reports may be reported as follows:

Moisture Content       __________%       Factor A    ________ (Table I)

Accept/Reject            __________%       Table I

Yellow-green mold     __________%

Penetrating mold        __________%

ARM                      __________%

GRADE = No. __________                          Factor B _________ (Table 2)

Inferior Copra ___________%                    Factor C _________ (Table 3)

Dust/Foreign Matter _______%                   Factor D _________ (Table 4)

Total Payment/kg = Semi-resecada price/kg x (100+A+B-C-D)/100

Note:Factors "A" and "B" may be positive zero or negative depending on the grade.

Total Payment for Delivery:

= Total Weight of Copra in kg. x Payment/kg.

"ANNEX C"

Table E
SAMPLING SCHEME FOR COPRA DELIVERED IN SACKS
Total Number	Minimum No. of	Individual Sample
of Sacks	Sacks Sampled	Wt.(Kg./Sack)
1	-	3	1	9
4	-	8	2	4.5
9	-	15	3	3
16	-	24	4	3
25	-	35	5	3
36	-	48	6	1.5
49	-	63	7	1.5
64	-	80	8	1.5
81	-	99	9	1.5
100	-	120	10	1.5
121	-	143	11	1.5
144	-	168	12	1.5
169	-	195	13	1.5
196	-	224	14	1.5
225	-	255	15	1.5
256	-	288	16	1.5
289	-	328	17	1.5
329	-	360	18	1.5
361	-	399	19	1.5
		400	20	1.5

PHILIPPINE COCONUT AUTHORITY

BOARD RESOLUTION NO. 023-03

PROPOSED ADMINISTRATIVE ORDER ON A HARMONIZED

RESOLVED that, upon recommendation of Management, and after a series of consultations with the affected industry sectors particularly the coconut millers, traders and farmers, the proposed Administrative Order containing the Implementing Rules and Regulations of the Revised Price Adjustment Scale for Moisture Content in Copra, hereto attached as Annex "A", be APPROVED as it is hereby APPROVED and CONFIRMED.

Done this 8th day of July 2003 at Diliman, Quezon City.

LUIS P. LORENZO, JR.

Chairman

(SGD.) DANILO M. CORONACION		SALVADOR A. CAMBARE
Vice Chairman/Administrator		Member
(SGD.) VIRGILIO M. DAVID		WABEEN C. LIM
Member		Member
(SGD.) GUILLERMO S. PALOMERA, SR.		(SGD.) OSCAR F. SANTOS
Member		Member