The Philippines is not the only country that is experiencing spikes in food prices, based on the latest report by the United Nations Food and Agriculture Organization. FAO data showed that global food prices rose an eighth consecutive month in January to their highest since July 2014. The monthly food price index averaged 113.3 points in January, 4.7 points (4.3 percent) higher than in December 2020 due to increases in the prices of sugar, cereals, vegetable oil, meat and dairy.
Unfortunately, all the countries that have seen surges in domestic food prices are also turning to the international market to beef up their food supply. Increased purchases from other countries, including China, are shrinking global supplies of various food items and driving up prices. China, the world’s most populous country, is shopping for more food as it continues to grapple with African swine fever (ASF) and animal diseases that have decimated its domestic hog population.
The report released by the Rome-based FAO on February 4 points to worrying trends that the Philippines must pay attention to, particularly since the country is also keen on importing pork to help tame inflation, which accelerated to 4.2 percent in January (See, “Amid holiday, government pushing pork imports,” in the BusinessMirror, February 9, 2021). For one, FAO noted that China has stepped up its purchases of corn and soybeans to feed its pig herd. This could put pressure on prices of imported soybean meal, which the Philippines imports because its soybean production is practically nil.
What could compound the problem of high international food prices for the Philippines is the outbreak of avian influenza in a number of European countries, which limited their poultry shipments. China, the world’s top pork producer, is increasing its purchases of imported pork and beef as it continues to grapple with ASF in its hog farms. Also, the continuous increase in oil prices will cause transport costs to go up, and this will be passed on to consumers.
Policy-makers must keep these things in mind when weighing options to ease the shortage of certain food items. While importing is the fastest route to plug the shortage in meat products, it is just a short-term solution and is becoming less feasible by the day as the Philippines would also have to compete with other countries facing the same supply problem. Timing is key, especially if the government has already made up its mind to turn to the international market for pork and other food items.
Apart from addressing ASF, the government must also coordinate production efforts particularly in areas free from the dreaded hog disease and avian influenza. Increasing the production of more broilers would undoubtedly ease the pressure on pork supply, as poultry is also favored by Filipinos (See, “Another inflation worry: Farm-gate broiler price rises,” in the Businessmirror, February 9, 2021). Expanding the output of aquaculture is another feasible option, as Filipino consumers would be given alternative protein sources. (See, “Food security task force forms sub task force on fish-based protein supply,” in the BusinessMirror, February 9, 2021).
The Philippines, like other countries, is experiencing high pork prices at the retail level because of supply problems. Runaway meat prices have a greater impact on low- and middle-income households since they spend a larger share of their income on food. We see a need to adopt a whole-of-nation approach to solve an emerging food security crisis.