Prices of canned meat products seen rising by up to 14%

Published August 31, 2020, 12:52 PM

by Madelaine B. Miraflor

The prices of canned meat products might go up by up to 14 percent as the Philippines’ largest group of meat processing companies reel from the impact of two import bans placed by the government against Brazilian and Australian poultry meat.

In a statement, the Philippine Association of Meat Processors Inc. (PAMPI) warned that the continuous government ban on poultry products, including mechanically deboned meat (MDM), from Brazil will lead to a shortage of raw materials and eventually higher prices of canned food products in the Philippines.

PAMPI Spokesperson Rex Agarrado said the tight supply of raw materials caused by the import ban would likely push up prices of canned meat products by 10 percent to 14 percent in the coming weeks.

Agarrado said this is because Brazil is the second largest supplier of MDM in the Philippines, accounting for 20 percent to 25 percent of the imported raw materials needed by meat processors to produce their products.

To recall, the Department of Agriculture (DA) issued Memorandum Order No. 39 two weeks ago imposing a temporary ban on the importation of poultry meat originating from Brazil, following reports that SARS-COV 2—the causative agent of Covid-19—was detected in a surface sampling conducted in chicken meat imported from Brazil to China.

Nevertheless, the Bureau of Animal Industry (BAI) Director Ronnie Domingo assured that despite the import ban, the Philippines will not have a shortage of poultry meat. 

On MDM chicken, which the Philippines don’t necessarily produce amid lack of facilities, Domingo said the government will review the documents it asked from Brazilian meat producers to ensure that the products they are exporting to the Philippines are safe from COVID-19 virus.

PAMPI, on the other hand, questioned the order, saying that Section 10 of Republic Act No. 10611, or the Food Safety Act of 2013, provides that, “in specific circumstances when the available information for use in risk assessment is insufficient to show that a certain type of food or food products does not pose a risk to consumer health, precautionary measures shall be adopted.”

PAMPI said while the DA based its decision on reports in China that SARS-COV 2 was found in Chicken wings imported from Brazil, China itself did not impose a ban on Brazil products, after finding out that the virus RNA or nucleic acid did not cause any infection on humans.

“China advised the source factories of the sample shipments to be cautious, but it did not impose a ban on Brazil imports,” Agarrado said.

Agarrado said the ban on Brazil poultry was complicated by a separate ban imposed by the DA on poultry products from Australia on concerns over possible bird flu contamination.

It is estimated that poultry products from Brazil and Australia account for about 50 percent of the total.

He said the local meat processing industry is now beginning to feel the impact of the import bans.

According to him, while the industry agreed to hold off any price increase at the start of the pandemic in March as mandated by the Price Act, it was able to do so because of the availability of affordable raw materials from Brazil.

Industry data showed the Philippines imported 219,062 metric tons of MDM in 2019, about a quarter of which came from Brazil.

Agarrado said Brazil emerged as a major supplier of poultry products because of its modern dresser systems that resulted in most competitive prices in the world. 

He said poultry products from Europe and the United States are at least 30 percent higher compared to those from Brazil.

“Because of the ample and affordable supply of poultry products from Brazil, we were not worried over the inventory of our raw materials,” Agarrado said.

“With the availability of poultry products from Brazil, we followed the order of President Rodrigo Duterte, through Trade Secretary Ramon Lopez, that we would not increase prices of our products,” he said.

Agarrado said this is no longer possible with the import ban on Brazil poultry products imposed by the DA two weeks ago.

The Department of Trade and Industry’s product monitoring system showed that as of August 14, the country’s inventory of MDM was good for only 30 to 45 days. 

“This means that after two weeks of the ban on Brazil poultry products, our inventory dwindled to 15 to 30 days,” he said.

Agarrado said the shipping time between Brazil and the Philippines is normally 45 to 60 days.

For its part, the Philippine Association of Feed Millers (PAFMI), the largest association of feed millers in the country, thinks it would be safer for the Philippine government to keep the import  ban on all Brazilian poultry meat.

In a letter to Cabinet Secretary Karlo Nograles, who also serves as co-chair of the Inter-Agency Task Force (IATF) for the Management of Emerging Infectious Diseases, PAFMI President Nicole Sarmiento-Garcia said her group supports the government’s ban on importation of meat products from Brazil.

“[We] ask the IATF, along with other relevant and concerned agencies, to continuously implement the ban and impose stricter protocols and measures to prohibit the entry of contaminated meat and poultry products in the country,” Garcia said.