King copra in Majuro

The Tobolar Copra Processing Plant in Majuro
The Tobolar Copra Processing Plant in Majuro
MAJURO (TR) – The continually hot and dusty conditions found on the Marshall Islands’ capital of Majuro can be rough on the interior of any car, explains Joe Heran as his brown 4-door sedan taxi rumbles down the main road from the airport.

“I fill this up with coconut oil — $2 a gallon,” he says, producing a spray bottle of light brown liquid from beneath the driver’s seat. “It helps to clean the inside of my car. I just wipe it down.” He then pats the dashboard just below the yellow fuzzy dice dangling from his rear view mirror.

Adding a little sparkle to a car’s interior is just one of the many uses for products coming from the coconut — its dried meat, or copra, has been a major source of income for many resource-poor nations in the Pacific over the last two centuries.

With the Marshall Islands being a collection of tiny coral atolls, revenue is left to only a few options: A small number of tourists come to dive at Bikini Atoll; fresh fish is exported; international assistance is received from Japan, the U.S., and China; and there is copra.

In spite of the copra market hitting upon tough times in recent decades, the Tobolar Copra Processing Plant is still going strong, hoping to put a little glimmer back on the commodity that was once known as “king copra” in the Pacific.

“There is nothing else,” says Jerry Kramer, the CEO of Pacific International, Inc. (PII), the company that holds the contract with the Government of the Marshall Islands to manage the Tobolar plant. The facility is a quasi-government operation that handles the purchasing of the copra, the management of the employees, the product sales, and anything else involved in running the business.

The actual processing of copra into its main marketable products — coconut oil and “copra cake” — is simple. The raw meat arrives by ship from the plantations in the outer islands and is stored in the plant’s large warehouse. At this point, the copra is white, but its outer skin is brown due to contact with the shell and from the fire used in the drying process by the pickers.

The copra is first ground and cooked. It is then fed into a large grinder, which is a recently refurbished meat scrap machine. Here, it is placed under enough pressure in the machine’s central barrel that coconut oil squirts out.

The oil is then filtered before being stored in one of two 16,000-ton capacity tanks. What remains is copra cake — a perfect, high-protein animal feed for farmers in Australia and the U.S. Kramer says that the dairy cattle farmers like it because the residual oil increases butterfat content, making a head of cattle’s milk more valuable.

Coconut oil, which is priced at nearly three times (per pound) over the cake, is exported via oil tankers to the U.S. where it is used in the processing of food, alcohols, and cosmetics.

The Tabolar plant opened for business in 1979. It processes 5,000 tons of copra on average each year. But the Japanese showed during their occupation of the islands before World War II that the capacity of the Marshall Islands’ plantations is much more. “From these same islands before the war, the Japanese processed 30,000 to 33,000 tons of copra per year,” says Kramer. “It was a part of the war movement and there was a lot of forced labor to do it, a lot of whipping.”

One reason for the falloff is that the workers of today usually do not make more copra than they can store for the next arriving vessel. As a result, if there is a shipping problem (a common occurrence), nobody works. Further, operators tend to work mainly just before Christmas and summer, periods when money is needed and kids are out of school. Additionally, if the world demand for coconut oil is low, then production ceases entirely.

“Over the past year, the price was very low. A low price means there is no demand. As a result, we weren’t able to make a sale for close to 2 years. We had a full warehouse of copra, a full tank of oil, and we couldn’t run the machinery,” Kramer says, waving his right hand in the direction of the plant just one block from his office.

A full tank of coconut oil is a two-fold problem. In addition to a stagnating inventory, there is also the issue of the accumulation of free fatty acid, which increases over time and is an impurity that must be refined out of the oil before it can be consumed. Kramer’s motto for selling the oil has thus become: “The fresher the better.”

After the war, Marshall Islands’ producers shipped their copra to Japan and its one buyer, Fuji Oil. This relationship also meant one price, a lack of competition that eventually led to a change in how the product was sold internationally. “We decided that we could add value, produce some jobs, and come up with a product that we could market internationally by going into processing,” Kramer remembers of his reasoning for constructing the Tobolar plant in the late ’70s.

Then came the battle with the mighty soybean. “All the crap that the soybean people did was wrong,” Kramer says of a soybean industry public relations campaign from a few decades ago. The push highlighted studies which concluded that coconut oil raised cholesterol levels. Kramer remains a skeptic, maintaining that “coconut oil is perhaps the healthiest oil you can eat.”

Copra’s world market price slowly fell in the ’80s. It was taken off the U.S. commodity exchange and has yet to regain its luster from years past.

There was a time, however, when copra was a highly valued crop. “Copra was king,” Kramer says. “Pound-for-pound it was more valuable than rice.” And it is true that merchants in the South Pacific in the middle of 19th century traded extensively in the crop between ports.

Today, even with the market still not near what it once was, Tobolar charges on. Recent machinery changes have increased oil extraction yields and a small in-house refinery has been added that allows for the production of soap. Perfumes are added and the colors changed so that the soap can be marketed internationally. “Marshallese women use it as a post-natal treatment for wrinkles,” the CEO claims.

Kramer’s office is a jumble of activity. The phone rings every few minutes. Employees continually rush in asking for his signature or opinion concerning any one of the many businesses that PII operates. However, the heavy-set 40-year resident of the Marshall Islands remains largely unruffled in his Hawaiian shirt, large stacks of documents swallowing his desk. Price manipulation, however, is one subject that will cause him to rise from his chair.

The government sets the price that Tobolar must pay to the producers. Many times the rate is excessive relative to the copra’s worth, essentially becoming a subsidy. Since the capital Majuro is low on living space and resources, it is beneficial for Senators within the government to provide an incentive for people in the outer islands to stay there.

“The only thing they [the Senators] can do for their people is copra. So come election time, Tobolar gets screwed,” fumes Kramer, who sometimes pays the producers double what he can fetch on the international market. With this sort of assistance in place, he says that it is very difficult to produce better products for the future.

If given the chance, Kramer would put a lot of money back into the industry, investing in beasts of burden or motorized vehicles. As it is now, workers move their harvested copra with a bags slung over their backs. Even a simple wagon is very rare.

The old ways still march on, the CEO says rather glumly: “You know, husk on a stick, crack it with a machete, dig out the meat with your hand, and put it over a fire.” As Kramer speaks, he mimics each activity with his hands. He pauses and then adds, “There is only so much a man can do.”

Note: This article originally appeared in August 2002 on the Sake-Drenched Postcards Web page.

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