The Philippines’ inventory of frozen pork is at historic high amid the continuous entry of imported pork while local pork output remained flat.
Data from the National Meat Inspection Service (NMIS) showed that inventories of frozen pork in accredited cold storages in the Philippines have been reaching historically high levels over the last few weeks.
From September 20 to 27, inventories of frozen pork in accredited cold storages in the Philippines stood at 79,390.78 metric tons (MT). While this is slightly lower than the peak of 83,197.70 during the previous week, this is more than a hundred percent from the 39,004.51 MT recorded during the same period last year.
From August 8 to 14, frozen pork inventory also peaked at 77,761 MT.
The increase in the supply of frozen imported pork, according to United States Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) here in Manila (Post), was brought about by the “intensifying [pressure] on these facilities to ensure they adequately supply markets in the absence of freshly slaughtered domestic pork”.
“The strict implementation of the minimum labeling requirements for imported meat and poultry also contributed to the build-up, as some supplies were unable to be cleared amid labeling discrepancies,” USDA said.
Amid lower hog output due to the continuous spread of African Swine Fever (ASF), Post also raised its forecast for pork imports to 500,000 MT.
From January to July 2021, Philippines’ pork imports already surpassed the 308,000 MT, up 300 percent year-over-year as imports supplement domestic supply. The Philippines’ top sources for imported pork so far are the European Union, Canada, and the United States.
It was in May when President Rodrigo Duterte’s Executive Order (EO) 134 became effective, lowering both the in-quota and out-quota tariff for pork for a period of one year.
EO 134, which amended EO 128, set the tariffs on pork imports under the minimum access volume (MAV) to 10 percent for the first three months, and 15 percent in the next nine months.
For imports outside the MAV, the tariffs are 20 percent for the first three months and 25 percent for the succeeding nine months.
At the same time, Duterte issued EO 133 raising the MAV allocation for pork imports by 200,000 MT, from its previous level of 54,210 MT.
MAV refers to the volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the World Trade Organization.
For next year, Post forecasts 2022 pork imports to reach 375,000 MT in the light of the scheduled expiration of additional pork MAV and reversion of pork tariffs to the previous higher rates by the first half of 2022.
This, while Post forecasts 2022 local production to be flat at one million MT carcass weight equivalent (CWE), as industry contacts report prospects remain uncertain amid continuing ASF cases across the country.
“While some commercial farms have started to repopulate to maintain their business, producers have generally remained cautious absent a commercially-available vaccine,” Post said.
“A potential ASF vaccine is undergoing local trials. Its success would buoy local producers’ confidence in repopulation and boost domestic production. Industry contacts further noted that recovery is not expected until 2024,” it added.
For this year, Post maintained its production outlook at 1.0 million MT, as the recent ASF outbreaks in Cagayan Province and Ilocos Norte (both located in northern Luzon) are offset by active repopulation efforts of a few commercial pig farms in Tarlac. Some ASF-free areas in Mindanao and the Visayas have also increased their production.
The latest report by the Philippine Statistics Authority noted that total pork production declined by 25.8 percent from January to June 2021 from 783,083 MT CWE to 579,502 MT CWE during the same period last year.
Regions with the largest production during the first half of the year were the Central Visayas, Northern Mindanao, and Western Visayas.