THE temporary lowering of tariffs on imported raw materials for animal feed products has gained traction, with more agriculture industry players supporting the proposal to mitigate the impact on domestic food prices of the worsening Eastern Europe conflict.
Oversea Feeds Corp. Vice President Chris Co said the government should consider lowering the tariffs on imported animal feed materials to ensure that the prices of finished feed products remain stable.
This would cushion, Co explained, the increase in meat prices due to compounding global factors, such as tightening feed supply and rising oil prices.
“It is really how to temper the problem. One thing the government can do is to review the rules on [tariffs] of our ingredients. There are feed ingredients that do not have [tariffs] anymore but there are some that still have,” he said in a virtual press briefing on Monday.
“They have to review it, take this into consideration to temper the costs of our ingredients. The tariff for imported finished feed products is zero while certain ingredients still have tariffs. It is like the government is favoring the finished products over raw materials that contribute to the local economy due to manufacturing,” he added.
Co noted the imported raw materials that still have tariff rates today: corn (5 percent for those originating from Asean; 35 percent for outside Asean in-quota; 50 percent for outside Asean out-quota), feed wheat (7 percent); fish oil (3 percent), distiller’s dried grains with solubles (1 percent).
“What we need to do is to temper the cost. The ideal situation is to remove all the tariffs [on these materials]. But if it is not possible, we should consider lowering tariffs for wheat and corn since these are the two major ingredients for aquaculture and livestock feeds,” Co explained.
Co also disclosed that importers are facing “unnecessary extra costs” due to domestic port congestion.
Oversea Feeds’ Co disclosed that exporters of raw materials have stopped shipping, adopting a “wait-and-see” stance on developments in Russia’s invasion of Ukraine, further putting pressure on prices.
“Exporters don’t want to ship raw materials right now. They are waiting to see what will happen. This will lead to feed ingredients getting more expensive, or go out of stock altogether,” he said.
“The question now is not to prevent the increase in prices because we cannot do anything about the war in Ukraine, but how to temper the problem,” he added.
Tugon Kabuhayan, a food security advocacy group, urged the government to “act fast” to avert a spike in food prices across numerous commodities. The group argued that lower feed supply would lead to lesser domestic animal protein production from meat to fish products.
Tugon Kabuhayan co-convenor Norberto Chingcuanco said they anticipate further supply disruptions in the coming months as farmers in Ukraine have stopped planting grain, and silos in the country were reportedly destroyed by Russia.
“If we don’t act fast, we will have a shortage of feeds. Less feeds means less production in the animal and aquaculture industries. Our country will once again resort to importation of fish and meat. We want to cushion the impact of the Russian-Ukraine war on our industries,” the group said.
The BusinessMirror earlier reported that local economists urged the President’s economic team to consider the suspension of taxes on oil and wheat imports to cushion the impact of hostilities in Eastern Europe on consumers. (Related story: https://businessmirror.com.ph/2022/02/25/experts-push-halt-to-wheat-oil-imports-tax/)