A trade bottleneck caused by the Covid-19 pandemic is now beginning to affect food-importing countries such as the Philippines (See, “Food shortage seen on global supply woes,” in the BusinessMirror, March 26, 2021). Players in the local logistics industry have sounded the alarm that shipping costs are going up as major exporting and importing countries grapple with a container crisis, lack of vessels, and congestion at transshipment ports. Exporters are bearing the brunt of the crisis as the delays in their outbound shipments could stretch to three months.
Industries that rely heavily on foreign countries for their raw materials, such as meat processing, would suffer the brunt of these delays. According to the Philippine Association of Meat Processors Inc., shipping delays exacerbated the supply woes their members are facing (See, “Meat processors file price-hike bids with DTI,” in the BusinessMirror, March 29, 2021). This has prompted local meat processors to file for a petition to increase the prices of their products, which have become more popular in recent months as pork and chicken have become more expensive.
The trade bottleneck is also threatening to foil the bid of the Philippines to import pork to plug the domestic supply shortfall, which was caused by the outbreak of African swine fever (ASF) (See, “3-month shipment delays negate bid to hike meat imports,” in the BusinessMirror, March 30, 2021). Shipments from Europe and the United States, which are major pork sources of the Philippines, are being delayed by a month due to the lack of containers and vessels. This development, coupled with the uncertainty over the reduction in pork tariffs, could make it more difficult for the country to flood the market with imports to ease the pressure on pork prices.
While this development is causing apprehension among importers, local producers welcome the news that some manufacturers have started procuring raw materials locally. The trade bottleneck has opened up opportunities that should be seized and capitalized by local producers and the government. This is the best time for concerned government agencies to look at the market and determine the products that have become more in demand and to further develop these industries.
Government should step up efforts to develop local industries and the agriculture sector, given the projection of experts that Covid-19 is not the last pandemic that the world will see. Investments must now be made to “future-proof” the Philippines and safeguard its food sources to cushion the adverse impact of developments in the international front, such as a trade bottleneck, on domestic food supply. Resources must be allocated to strengthen the country’s borders and to put up the necessary facilities that will allow the Philippines to reduce its reliance on imported food products.
We hope that the budget proposal of the administration for 2022 would include more investments in critical sectors such as agriculture. For one, the local livestock sector is not out of the woods yet and stakeholders need all the help they can get to eliminate ASF. Hiking investments in research and development is also crucial if policy-makers are truly intent on ensuring the country’s food security.