The United States stands to lose a $230-million a year market after Philippine commercial poultry raisers and veterinary product suppliers decided to source their soybean meal and animal health products requirements from elsewhere.
This was in retaliation to the US' continued dumping of cheap chicken meat in the Philippines at prices far lower than the cost of production here.
Philippine Association of Broiler Integrators (PABI) president Ronald Mascarinas and United Broiler Raisers Association (UBRA) president Gregorio San Diego said their members have agreed to stop buying animal feed ingredients, in particular soybean meal, from the United States and are now talking to suppliers from other countries.
The Philippine poultry and livestock sector buys around $201 million worth of soybean meal from the US annually and utilizes another $31-million worth of veterinary products.
On the other hand, the US exports only $18-million worth of chicken to the Philippines. "If they don't stop dumping their leg quarters here, then they stand to lose a lot more," the two poultry officials said.
They added that even if they do not resort to such drastic measure, the US will still eventually lose the Philippine market for soybean meal. "At the rate they are dumping their chicken, we won't have a local poultry industry to speak of very soon," they said.
UBRA members, which are small and medium scale commercial poultry raisers and produce 20 percent of the country's poultry production, said many of their member poultry farms have already closed shop.
Mascarinas said PABI members are luckier because their companies have operations other than poultry. Except for Vitarich Corp. and Tyson Agro, other poultry integrators like Swift Foods, San Miguel, Purefoods, General Milling and Universal Robina Corp. are into other businesses. PABI members produce the remaining 80 percent of the local poultry supply.
Mascarinas and San Diego have already informed US agricultural counselor to the Philippines Charles Alexander of their decision.
"The only reason why we have been buying soybean meal from the US, even if it is more expensive, is because of quality. But other countries, like India, have already offered to sell soybean meal to us with the same quality as the US but at a cheaper price," Mascarinas revealed.
From only 2,753 metric tons of broiler meat in 1998, US exports to the Philippines soared to a whopping 31,899 tons last year, or a 1,059-percent increase, according to a National Chicken Council Washington report.
Imports of chicken meat from the US reached 2,933 metric tons in Jan. 2000 as against only 441 tons during the same period last year. Broiler meat imports in Feb. 2000 also showed a remarkable increase to 3,121 tons from only 766 tons last year.
US leg quarters at a 45-percent tariff are able to come in at P36 per kilo and in the case of smuggled ones (zero tariff), 25 per kilo. This is compared to locally produced leg quarters that are priced at P57 per kilo (live).
Americans consider leg quarters 'unhealthy' and prefer the white meat or chicken breast. Thus, the US has been dumping leg quarters all over the world, at dirt-cheap prices. In Ukraine for instance, broiler parts exports from the US increased 896 percent in 1999 compared to 1998. In Korea, sales of US chicken meat rose 388 percent during the same period while in Latvia and Estonia, imports of US broiler parts increased 143 percent and 199 percent, respectively.
Mascarinas also revealed that duty-free stores continue to sell US leg quarters and even claim that they have paid tariffs for these. "They are now selling US chicken at retail which is in violation of the law," he said.