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Seaweed a Godsend for Filipinos : Trade: The fat substitute carrageenan could be a big boost to the economy. But U.S. producers are trying to derail imports.


"McDonald's is a food product leader," Dakay said. "More beef processors are now considering carrageenan. A whole new market is about to open."

Said Vicente Zaragoza, managing director of the Santa Ana-based Carrageenan Marketing Corp., Shemberg's U.S. distributor: "Since the introduction of the McLean, we're getting 100 calls a day about carrageenan. Over the next six months, I expect many other (beef processors) to come up with their . . . own low-fat patty."

While the extraction process was refined by the Japanese about 20 years ago, some in Ireland's coastal communities have long boiled seaweed to create a food filling. Boiling is still part of one process for extracting carrageenan. After the plants are cleaned, dried and boiled into a goo, carrageenan is extracted and commonly sold in a powder or chip. The major American producers have a more extensive process, using a chemical such as alcohol to extract the substance. The Filipinos use a mechanical extraction process.

Handicapped by a foreign bank debt of about $29 billion, the Philippines needs to boost exports to generate more taxable revenue. The country had a trade deficit of $3.9 billion in 1990. In addition, the economy has been wracked by political uncertainty and natural disasters the past two years. Hundreds of thousands of people lost their livelihood when farms, shops, offices and factories were swept away by the eruptions of Mt. Pinatubo. The country's unemployment rate is now about 17%.

Philippine President Corazon Aquino had been trying to link the continued U.S. military presence in her country to U.S. help with the Philippine economy, according to White House officials, but the Bush Administration has tried to keep the issues separate. The two administrations last month reached a $2.2-billion agreement allowing the United States to continue to use Subic Bay Naval Base. The Philippine Senate is expected to vote on the pact later this month.

Philippine government officials say they raised the carrageenan issue and other trade matters during the military bases talks after the FDA last year decided to review a July, 1990, decision to allow U.S. food processors to use Philippine PNG. The Atlanta-based International Food Additives Council and two big American carrageenan producers--FMC Corp of Chicago (which supplies McDonald's) and Hercules Inc. of Wilmington, Del.--had asked for the review.

FMC Corp.'s Washington-based lobbyist, Harold Russell, says many domestic carrageenan producers suspect that the U.S. State Department may have pressured the FDA into approving the sale of Philippine PNG. Russell said FMC wants the FDA to prevent Philippine companies from marketing PNG as carrageenan. He said the PNG contains cellulose, protein and metals.

"The consumer should be informed that . . . our product is an extract of seaweed," Russell said. "Our product is pure carrageenan, but (PNG) contains ground (seaweed) leaf."

Filling a Void:

The U.S. Food and Drug Administration recently ruled that Phillipine carrageenan, a low calorie food additive derived from seaweed, can be sold to processors in the United States. With American demand for low-fat food on the rise, Phillipine companies expect to boost sales of their food additive filler dramatically and bolster the Phillipines' economy.

1990 Carrageenan exports to the U.S.: $3 million

1990 Carrageenan exports worldwide: $50 million

1992 (projected) Carrageenan exports to the U.S.: $40 million

1992 (projected) Carrageenan exports worldwide: $90 million

Source: Phillipines Embassy, Agricultural Section

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