The country’s pork production this year would remain flat at 1 million metric tons (MMT) as pig producers remain “hesitant” to rebuild stocks amid the continuing threat of African swine fever (ASF), an international agency said.
The United States Department of Agriculture Foreign Agricultural Service in Manila (USDA-FAS Manila) said in a report it published recently that local pork producers are still awaiting development related to a vaccine against the fatal hog disease.
“FAS Manila maintains 2022 pork production at 1 million MT. Industry is continually hesitant to rebuild stocks despite the government’s best efforts to encourage repopulation amid the continuing threat of ASF infection and the absence of a locally-available vaccine,” the agency said in its latest Global Agricultural Information Network (Gain) report.
Because of this, the Philippines will rely more on imported pork products to plug the domestic supply shortfall and temper rising prices for the second consecutive year.
“FAS Manila increases the 2022 pork import forecast to 400,000 MT from USDA’s 375,000 MT, following the issuance of Executive Order (EO) No. 171, Series of 2022,” the USDA-FAS Manila said.
However, the USDA-FAS Manila noted that the Philippine government’s decision to extend lower tariff rates on pork imports would only provide “minimal” and “brief” relief to consumers sans an expansion of the country’s minimum access volume (MAV).
“Unlike in 2021, no changes were made to the minimum access volume for pork, which remains at 54,210 MT (February 2022 to January 2023),” the USDA-FAS Manila said. The Philippines expanded its pork MAV last year by 200,000 MT.
“The government’s relative half-measure to improve market access in 2022 compared to 2021 is likely to offer only minimal and brief relief to consumers given the relatively still high in-quota duty rate and no expansion of the in-quota volume.”
Local pork prices are expected to rise due to higher feed and fuel prices that will drive hog raisers’ production costs, according to the USDA-FAS Manila.
“Following the expiry of more favorable market access conditions in early 2022, frozen pork inventories in accredited cold storages steadily declined, which led to an overall tightening of available supply and further contributed to an increase in pork prices,” it said.
The USDA-FAS Manila increased its pork consumption forecast for the Philippines this year to 1.399 MMT compared to USDA’s 1.374 MMT. The latest pork consumption estimate by the USDA-FAS Manila, however, was 4 percent lower than last year’s 1.458 MMT.
“While measures to-date are only expected to partially blunt pork inflation, Philippine pork consumption has proven to be relatively inelastic, with households already spending roughly 40 percent of expenditures on food.”
In the same report, the USDA-FAS Manila maintained its production forecast for chicken at 1.36 MMT, slightly higher than last year’s 1.343 MMT.
“Through the first quarter, production is up 13 percent year-over-year with large poultry farms still relatively unaffected from highly pathogenic avian influenza (HPAI),” it said.
“Meanwhile, several local government units continue to impose restrictions that go above and beyond the Philippines’s national Avian Influenza Protection Program, which has further restricted the availability of live chicks.”
The USDA-FAS Manila noted that chicken prices are likely to “remain elevated” due to ongoing avian influenza restrictions and rising production costs.
“FAS Manila holds 2022 chicken meat consumption estimates given conditions are progressing as earlier expected,” it said.
“MDM [mechanically deboned meat] demand remains particularly robust as it increasingly represents a key raw material for the processed meat industry and as the public seeks ways to save budgetary outlays on increasing food costs.”
The USDA-FAS Manila said total chicken meat imports this year would slightly decline to 420,000 MT from 437,000 MT last year.