As pork prices rise: DA probes, groups weigh in

LOCAL hog raisers said pork prices climbed beyond P300 per kilogram in Metro Manila due to lack of supply in Luzon, as 40 percent of the sow population nationwide is gone due to African swine fever (ASF)-related actions.

In the view of the Samahang Industriya ng Agrikultura (Sinag), there is no pork shortage in the country but only a distribution problem that has not been resolved as early as January.

“We have been urging the DA to bring 30 percent of live hogs from VisMin to Luzon but they did not do it,” the group said in a statement.

Meanwhile, meat importers are now proposing that the government reduce pork tariffs to be able to bring in cheaper supply and prevent skyrocketing of prices.

Pork Producers Federation of the Philippines Inc. (ProPork) President Edwin G. Chen told the BusinessMirror the Philippines is experiencing what China and Vietnam suffered a year after ASF outbreaks: loss of sow population leading to lack of pig supplies.

Chen explained that the government’s data of over 350,000 pigs culled by the government only captures the figure of officially reported cases but not the herd that was early harvested by raisers to avert further losses caused by ASF.

“Seeing that there are a lot of ASF outbreaks in their area, some raisers harvested their pigs early and sold them in bulk at lower prices. Once you unload all your stocks, there will not be another cycle [due to threat of ASF],” he said.

“Based on the industry’s estimates, reckoning last July, about 40 percent of the total sow population in the country is gone.

If we lose that volume of sow, then the natural consequence is that we will have a shortage,” he added.

The estimate, Chen pointed out, could be even higher today as ASF spread to more areas in the country after July.

It takes about nine months to 10 months to harvest a pig for meat consumption from the time of its birth to slaughter. Hence, the country lost the potential pork supply from the sows there culled by the government from last year until early this year.

DA investigates

Latest Philippine Statistics Authority (PSA) data showed that the country’s total number of sow as of July 1 declined by 9 percent to 1.6 million heads while total inventory of fatteners declined by almost 24 percent to 3.015 million heads.

PSA data also showed that the country’s grower inventory fell by 11 percent to 2.885 million heads from last year’s 3.245 million heads.

Last Friday, the Department of Agriculture (DA) declared that it will investigate the high prices of pork in the market amid high levels of frozen pork inventory.

The DA said it is possible that there is a deliberate effort by traders to withhold the release of pork products in the market.

The DA added that as of October 21, prices of pork kasim (ham) has reached P320 per kilogram while pork belly (liempo) climbed to P360 per kilogram in most Metro Manila markets. The prices were P20 to P40 higher than their quotations two weeks ago, according to the DA.

“We’re looking into reasons why there’s a very slow withdrawal of frozen pork products despite the availability of supply, and demand has started to pick up as the government opens up the economy,” Agriculture Secretary William D. Dar said.

“The DA will not hesitate to file cartel charges if hog growers and traders were found engaging in anti-competitive practice and restricting the supply of pork products, resulting in higher prices at retail markets,” Dar added.

The retail prices are just reflective of the prevailing live-weight prices of hogs in Luzon, which has reached a P200 per kilogram average quotation, Chen said.

During a House of Representatives hearing, Philippine Swine Industry Research and Development Foundation Inc. President Arnulfo Frontuna estimated back then that the ASF has wiped out 30 percent of the P260-billion hog industry.

He also projected then that it could wipe out 60 percent of the industry by September based on the rate the ASF was spreading.

‘Pig highway’

Chen proposed that the government create a “pig highway” to allow the easier transport of live hogs from Visayas and Mindanao to boost domestic supply in Luzon.

Chen said the government could persuade more shipping lines to transport live pigs from Visayas and Mindanao to Luzon.  He noted that only one shipping line ferries pigs between the island regions.

Furthermore, he proposed that the DA use its limited fund for ASF in re-stocking population in ASF-free areas, preferably in Visayas and Mindanao.

Visayas and Mindanao are not yet ready to export carcasses to Luzon due to lack of blast-chilling and blast-freezing facilities, Chen said.

It takes 3 days to transport live hogs from Mindanao to Luzon, and about 1 and a half days to 2 days from Visayas.

‘No shortage, just distribution’

The Sinag said there is no pork shortage in the country but only a distribution problem that has not been resolved as early as January.

“We have been urging the DA to bring 30 percent of live hogs from VisMin to Luzon but they did not do it,” the group said in a statement.

Meanwhile, The Philippine Chamber of Agriculture and Food Inc. (PCAFI) agreed that bringing in hogs from Visayas and Mindanao would temper the high pork prices in Luzon.

Citing industry estimates, Pcafi President Danilo V. Fausto told the BusinessMirror local hog production has been down by 30 percent to 40 percent.

Fausto said the pressure is on the government to intensify its efforts against ASF to regain investor confidence in pig farming, particularly in Luzon.

Worse, Fausto said Filipinos are running out of cash due to the challenges brought by the Covid-19 pandemic; hence, resulting in a persisting anemic demand.

Cold Chain Association of the Philippines President Anthony S. Dizon said consumers could start shying away from buying pork from the mere fact that its prices are already over P300 per kilogram.

Based on its latest projections, the DA estimates that the country would have a 45-day pork shortfall by year-end.

Philippine Association of Feed Millers Inc. President Stephanie Nicole Sarmiento-Garcia told the BusinessMirror that their commercial hog feed sales are down by 30 percent to 40 percent in Luzon.

Sarmiento-Garcia added that integrators, those who have their own feed mills and hog farms, have reported a 20-percent downsizing.

She is “very pessimistic” on the recovery of the hog industry in Luzon sans a clear road map from the government.

“What we need to do right now is to find a way to transport meat from VisMin as cheaply as possible. We need to find a middle ground on how we can achieve that,” she said.

Chen said if not for the current movement of live hogs from Cebu and General Santos City, among others in the past months, pork prices in Luzon could have gone way higher to the vicinity of P400 per kg.

Reduce tariffs

Meat Importers and Traders Association (Mita) President Jesus C. Cham said the government could consider reducing the current tariff on pork imports from 30 percent to 15 percent to encourage the entry of cheaper products.

Chen pointed out that consumers did not shift from buying fresh pork meat to frozen meat due to little price disparity, with the latter being even more expensive.

Besides, Filipino consumers still prefer freshly slaughtered pork meat over frozen imported ones.

Cham said the landed price of imported pork kasim is at about P220 to P230 per kilogram while pork belly is around P250 per kilogram, which fetches a retail price of about P300 per kilogram in supermarkets.

“The DA should take a close look at their projections of pork production in the Philippines and consider now reducing import duties from 30 percent to 15 percent,” he said, adding that the government should reopen its borders to pork products from Belgium and Germany to widen supply sources.

For Cham, demand remains anemic for meat products since Filipinos’ purchasing power declined in the Covid-19 pandemic.

Besides, he said, it is hard to point out where the bottlenecks in the unloading of frozen imported pork inventory are sans the availability of market segmentation data.

“We need to see how much volume is intended for the wet market, for restaurants, for processing. The DA has to establish that data so we can determine where the logistics problem is,” he added.

According to an industry source, it is possible that a certain volume of the current 51,530.39 metric tons of imported frozen pork inventory is for the production of hams.

“It’s not because the economy opened, then the demand will go back to its normal levels. Restaurant capacity is at 30 to 50 percent and yet only few people buy and dine out,” Cham noted.

Nonetheless, most industry stakeholders agree that the current retail prices of pork could go even higher next year as the country reels from lower hog inventory.

“By the time of first quarter to first half of next year, we will feel the impact of further tightening of supply caused by the spread of ASF in Region 4A,” Chen said.


1 comment

  1. Very comprehensive reportage.

    I salute the agri news team of Business Mirror.

    Excellent way of news gathering.

    Very timely too👍👍👍

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Previous Article

El Nido reopens to tourists, but with strict Covid testing

Next Article

BSP: 4-m new basic deposit accounts opened in pandemic

Related Posts

Read more

ADB extends $300K grant
to upgrade workers’ skills

THE Asian Development Bank (ADB) will extend a grant worth $300,000 (about P16.143 million at current exchange rates) to five industry networks to improve the skills of workers in tourism, construction, animation, agribusiness and women-led small and medium enterprises (SMEs).