Civet Coffee

Civet coffee (Kopi luwak) is produced mainly on the islands of Sumatra, Java, Bali, and Sulawesi in the Indonesian Archipelago. It is also produced in the Philippines (where the product is called motit coffee in the Cordillera, kape alamid in Tagalog areas). Kopi luwak is the most expensive coffee in the world, selling for between US$100 and $600 per pound. Civet coffee ranked third from the most expensive coffees in the world. Thus, most of the consumers of this coffee belong to the high income and wealthy group. Source?

The production and export of coffee was once a major industry in the Philippines, which 200 years ago was the fourth largest coffee producing nation. Today, however, the Philippines produce only .012% of the world’s coffee supply. This low productivity was due to continous industrialization in areas near urban areas. Source? Juan, 2012 stated that the Philippines remains a net importer of coffee due to increasing demand which today stands at 65,000 MT. This increasing demand, demands us also to produce more coffee.

A study of Joyce Lacandula regarding the potential demand of civet coffee as new sources of income for farmers, showed that income affects willingness to pay. As determined in this study, the major downside in marketing this productis its high price.

B. Objectives of the Study

The study generally aims to compare the potential demand of Civet Coffee in Davao City and in Cordillera. Specifically, it aims to;

1. Identify the potential demand and marketability of Civet Coffee in Cordillera.

2. Compare the result of the previous study regarding the demand for civet coffee in Davao City and in Cordillera.

C. Scope and Limitations

The study focuses on comparing the potential demand of Civet Coffee here in Davao City and demand for the same coffee in Cordillera Province. The study is limited to the demand of Civet Coffee in Philippine setting only. The researchers used the thesis of Joyce S. Lacandula entitled “Potential Demand for Civet Coffee in Davao City” as a basis for comparison of the demand. The data used by the researchers came from the thesis itself and secondary data collected from the internet. The researchers was not able to work on the given recommendations of the chosen thesis because of some constraints such as time. Nevertheless, a comparative analysis of potential demand of Civet of Davao and Cordillera Province was undertaken.

D. Significance of the Study

There has been a study regarding the potential demand for Civet Coffee here in Davao City (Lacandula, 2009). However, there has been no study conducted comparing potential demands of the said coffee from other places. This study provides a new potential demand of Civet Coffee and allows us to compare the demands of the two places. Being aware of the different demands of Civet Coffee across places can help us understand the aggregate demand of the product. Comparing these demands can help us analyze what external factors affect the consumer’s preference in buying Civet Coffee in different places.

METHODOLOGY

A. Theoretical Framework

The law of demand was utilized in determining the potential demand for civet coffee in Davao City. It states that, if all other factors remain equal, the higher the price of a good, the less people will demand that good. Based on the thesis, result shows that there is a high demand for civet coffee in Davao City. The general framework that has been used is the primary basis in determining the demand for civet coffee, however it includes other factors. Aside from price, there were other factors or determinants of demand that has been considered such as the prices of related good and the consumer’s tastes or preferences, gender, price of the usual coffee bought, average daily consumption of coffee, consumers awareness about civet coffee and the willingness to drink civet coffee.

Upon improving the study, the researchers considered one of determinants in determining the potential demand of civet coffee which is consumer’s income. The researchers based the results from the relationship between income and willingness to drink civet coffee. Study shows that civet coffee ranked third from the world’s most expensive coffee. Thus, those in the high income class were more willing to pay for civet coffee compared to those in lower income classes. The general framework was used as a basis in this new independent variable since price was considered as a major factor in consumption.

The researchers obtained the potential demand of civet coffee in Davao City provided in the thesis. The result was then compared to the potential demand of civet coffee in the Philippines as a whole. Analysis of the civet coffee industry in the Philippines and in the world, was also undertaken.

RESULTS AND DISCUSSION

The study of Lacandula generally aimed to determine the potential demand of Civet coffee in Davao City. The study uses different indicators. These indicators include the following; age, gender, monthly income, price of the usual coffee bought, average daily consumption of coffee, consumers awareness and the willingness to drink civet coffee.

Result show that in the case of consumer’s awareness about Civet Coffee, 56% indicated awareness about Civet coffee. Based from the results for the willingness to drink civet coffee, 82% have expressed their willingness to drink civet There is a high potential demand for Civet Coffee in Cordillera. These beans are named as the rarest and the most expensive coffee in the world according to Forbes magazine. Dominador Dongla, Bocael secretary, said the civet cat coffee had given hopes to the farmers who earn P170 to P270 per kilogram from selling regular coffee beans. A public market distributor in Northern Luzon sells these coffee beans for P600 for every 50 grams and P1000 for every 100 grams. Also, variety of these beans (Arabica coffee) costs P170 and P220 per kilogram in Benguet. Due to its high prices, trade officials in the area opened to bid in cash into the demand for Civet Coffee. The Nor Ref Food Products won the bid, a local producer. Thomas Killip, presidential assistant for Cordillera affairs, said programs promoting the civet cat coffee should be made part of the organization of different coffee councils in the region.

Samuel Peñafiel, DENR regional director, said global warming, which has altered climate conditions, pose a serious threat to the habitat of the civet cat. Proposals to protect these cats and their habitat in the Northern Luzon areas have already been submitted to the Department of Environment and Natural Resources.