Babs, which killed at least 163 people, whipped Bicol region in the southern tip of the country's main Luzon island before ripping through rice-growing areas in northern provinces.

It also lashed parts of central Visayas region in its three-day March across the Philippines, the world's largest exporter of coconut oil.

Luzon, including the key Bicol region, and the Visayasislands account for up to 40 per cent of total production.

Babs left the country and now threatens Taiwanand China's coastal provinces of Guangdong and Fujian, but its impact on Philippine coconut production was unclear.

"We still have to get the overall assessment of damage. But definitely this will affect the overall outlook for 1999," one trader said.

Another said: "Bicol was heavily damaged... It will have an effect on production but as to how much, wedo not know yet."

Mindanao island, which accounts for 60 per cent of National production, was spared by Babs.

"Coconuts were destroyed so its impact will linger for the next three, maybe five years," Rolando Dy, director of the University of Asia and the Pacific's Institute for Agribusiness Development and Policy, told Reuters.

Last week, Philippine Coconut Authority (PCA) Chief Eduardo Escueta said coconut output in copra terms might total between 2.2 million and 2.4 million tonnes this year, down from 2.6 million tonnes last year.

Copra or dried coconut meat is the raw material in the manufacture of coconut oil.

PCA officials said they had no immediate estimate of the damage and its impact to production this year and next year.

Traders said it might take days to assess the damage because power and phone lines across Bicol were still being restored.

The typhoon did not uproot coconut trees in the Visayas in central Philippines, but flower pods were affected and would take 18 to 24 months forthe trees to recover, a trader said.

Another trader in a coconut mill in the Bicol region said the damage might not be as bad as first expected.

"Some trees have fallen but not as worse as people have expected," the trader said, adding a colleague had made an aerial survey in Camarines Sur and Camarines Norte provinces on Saturday.

The two provinces account for the biggest output in the Bicol region, which is composed of six provinces, he said.

The hardest hit, Catanduanes, is not a major coconut growing area, traders said when asked to comment on television footage of massive devastation in the area.

Coconut oil prices surged by as much as $50 per tonne cost-in-freight in Rotterdam last week in anticipation of the damage Typhoon Babs would inflict on coconut trees.

Traders said coconut oil prices this week would take its cue from the official estimate of the destruction.

"Estimates you hear from the market are just speculation. Everybody wants to know what the government thinks," said onetrader.