Philippine poultry raisers warned the Americans yesterday to stop dumping chicken leg quarters in the country or face losing a big market for US wheat, soybean meal and yellow corn.
In a letter to US Agricultural Counselor Charles Alexander, the United Broiler Raisers Association (UBRA) noted that the value of chicken leg quarters which is being imported from the US into the Philippines is small compared to the value of feed ingredients which Filipino poultry raisers buy from the US.
"Save the Philippine broiler industry and you maintain US exports of wheat, soybean meal and corn to your large buyer. Kill us and you lose your market," UBRA chairman Gregorio San Diego Jr. told Alexander.
UBRA, composed of small and medium commercial poultry raisers, now officially joins the Philippine Association of Broiler Integrators (PABI) in the war against the dumping of American leg quarters in the country.
PABI includes San Miguel Foods, Swift Foods, Purefoods Corp., Universal Robina Corp., Vitarich Corp., General Milling Corp., and Tyson Agro-Ventures.
San Diego noted that they now stand to lose their livelihood, displacing 400,000 jobs within the next three months if nothing us done to control the unrestricted entry of cheap imported chicken leg quarters into the Philippine market.
He said the dumping of leg quarters and other chicken parts comes at a time when the industry is already facing its own surplus brought about by low demand.
San Diego, in his letter to Alexander, emphasized that the Philippine broiler industry is one of the biggest importers of wheat, soybean meal, and corn, which are the main components of broler feed. "If the local broiler industry dies, we will become importers of chicken. This will halt all our importation of wheat, soybean meal, and corn," he said.
Even at the out-quota tariff rate of 50 percent, importers still find it profitable to bring in American leg quarter. At this duty, the landed cost of leg quarters at 55 cents a kilo is only P34.50 per kilo and at 60 cents, P37.60 per kilo. This is even lower than the cost of producing chicken in the Philippines.
PABI president Ronald Mascarinas earlier said that the Americans can afford to sell the leg quarter at dirt-cheap prices since they are able to more than recover their cost of producing the chicken by just selling the part or white meat.
While the US sells the whole chicken at $1.34 per kilo, the breast part sells at a much higher price of $3.15 per kilo, and the leg quarters, 55 to 60 cents per kilo.
Agriculture Secretary Edgardo Angara now wants to ban imports of leg quarters and instead allow only the importation of whole chicken outside the minimum access volume (MAV) mechanism.
At a tariff rate of 50 percent, the landed cost of the whole chicken will be around P79 per kilo, excluding the importer's and retailer's mark-up.
"This only goes to show that without dumping, American chicken will not be competitive in the local market," Mascariñas said. Locally, dressed chicken is priced at between P60 and P70 a kilo.