Meat prices rising despite 150% surge in imports

Published April 19, 2021, 2:05 PM

by Madelaine B. Miraflor

Meat prices continued to rise despite the recent 150 percent surge in pork import volume, casting doubt on the government’s recent move to bring down tariffs on imported pork.

A customer pays for pork at a roadside market stall in Mandaluyong City, Manila, the Philippines. (Bloomberg file)

“The tariff cut that now prevails under Executive Order (EO) 128 is totally useless as pork price is seen to remain expensive,” United Broilers and Raisers Association (UBRA) said in a position paper submitted to Senate.

As of Monday (April 19), the prevailing price for pork kasim and liempo at select markets in Metro Manila stood at P370 per kilogram (/kg) to P380/kg, based on DA’s latest price monitoring report.

This is higher than the suggested retail price (SRP) of P270/kg and P350/kg the DA previously imposed on pork kasim and liempo, respectively.

“The stated purpose of EO 128 to bring down pork prices to affordable levels and dampen inflation will not happen,” said UBRA President Lawyer Jose Elias “Bong” Inciong.

Inciong further said that the SRP on imported pork will not necessarily change anything because this is the same level of price cap already being implemented before and was not necessarily followed. 

“If this is the expected retail price after reducing the tariff for pork, then there is no improvement in the situation of our consumers.  Since there will be no significant change in retail prices, why forego badly needed revenues by reducing tariffs on imported pork?” said Inciong. 

Citing data from the Bureau of Animal Industry (BAI), he pointed out how there was already a substantial increase in pork imports during the first quarter of the year, but pork prices still have not gone down.

BAI data showed that pork imports surged by 150.70 percent or 66.376 million kilos in pork imports early this year. This is from an import volume of 44.031 million kilos from January to March 2020 to 110.419 million kilos in the same period of 2021.

Imports of prime cuts like bellies and pork cuts significantly increased by 254 percent or from 10.719 million kilos in January to March 2020 to 38.024 million in the same period of 2021.

Proposed by the Department of Agriculture (DA), EO 128 was signed by President Rodrigo Duterte two weeks ago to cut the import tariff for fresh, chilled or frozen pork.

Under the minimum access volume (MAV), the tariff was reduced to 5 percent from 30 percent for the first three months of the order’s implementation.

It will be increased to 10 percent in the next nine months, and will return to 30 percent towards the end of the EO’s implementation.

For pork imports outside MAV, the tariff rate will be cut to 15 percent from 40 percent for the first three months of the EO’s implementation. It will be raised to 20 percent in the next nine months and will be back to 40 percent after a year.

Aside from the reduction in tariff, Duterte also backed DA for its proposal to increase the MAV allocation for pork imports this year by 350,000 MT. This still needs Congress approval.

The DA made both proposals in hopes to bring in more imported pork in order to bring down the retail price of the commodity, which has been going up since the latter part of 2020.

UBRA asserted government should rather let tariff rate at 30 percent in-quota and 40 percent out-quota.

The farmers’ group lamented that the current pork crisis is not only a result of the local hog industry’s contraction due to African Swine Fever (ASF). Rather, it is also the “natural consequence of the Philippine government’s intentional plan in the last 25 years to depend on importation and neglect its own Filipino farmers’ welfare,” the group added.

Meanwhile, in contrast with UBRA, the Foundation for Economic Freedom (FEF) supported the government’s plan to increase MAV allocation on imported pork as well as the move to reduce its tariff rates.

FEF said the Filipino people cannot afford to wait for medium to long-term interventions to repopulate hogs locally and overcome the ASF.

“Millions of consumers have very limited room to absorb major price increases in essential goods, as the COVID-19 pandemic has resulted in widespread loss of income and jobs. Refusing to take immediate short-term action will exacerbate the elevated hunger incidence in the country. The immediate task at hand is to give the people access to adequate and affordable food,” FEF said. 

“Without facilitating an increase in imports, pork inflation will remain at highly abnormal levels,” it added.

Philippine Statistics Authority (PSA) data showed that the country’s swine inventory decreased by 3 million heads or 24 percent from 2020 to 2021.

With this, the National Economic and Development Authority (NEDA) projects that the carcass pork deficit is around 477,000 metric tons (MT) based on the historical per capita demand for pork.

The large supply deficit led to a drastic increase in pork prices. Another PSA data showed that in March 2021, Philippine pork prices averaged P288 pesos/kg or 36 percent higher and even reached as high as P327/kg in the National Capital Region (NCR) or 59 percent higher compared to last year.

This resulted in meat being the top contributor to inflation of 1.4 percentage points to the March 2021 inflation rate of 4.5 percent.