Chicken imports seen to hurt local broiler industry

The Philippine Association of Broiler Integrators (PABI) and United Broiler Raisers Association (UBRA) said the government’s plan to import cheap imported chicken will hurt the local broiler industry. PABI and UBRA yesterday jointly aired a distress signal to government in the wake of the skyrocketing cost of feed ingredients and the anticipated decline in farmgate prices of chicken once the newly-authorized imports come in.

"We will be in a tight bind. The planned imports, if these materialize, will come at a period of low demand for chicken and increased output by broiler producers. This twin development may cause a significant drop in prices. Worse, the expected collapse in prices will happen at a time that the cost of feed ingredients are at an all-time high," Rita Palabyab, PABI president, said.

Data from the Bureau of Animal Industry (BAI) show that corn prices this year rose to over P11 per kilo from an average of P8.71 per kilo in 2003. In 2002, yellow corn, the most important feed ingredient in broiler production, was only P7 to P8 per kilo. Soybean meal prices also went up, from an average of P15.76 per kilo in 2003 to more than P22 per kilo this year. In 2002, soybean meal only cost P12-13 per kilo.

Meanwhile, fishmeal reached a staggering price of P38 per kilo, from an average of P28.22 last year. In 2002, fishmeal was only P25 per kilo. The prices of other substitute ingredients followed suit. Wheat prices increased from P11.20 in January this year to P12.40 per kilo in April. Coconut oil prices also surged from P32.50 in January to P42 per kilo in April.

While the production costs soared, farmgate price of chicken softened – from a high of P71 per kilo last year to P65-P68 per kilo as of yesterday. Broiler producers pointed that demand went down during the bird flu scare but recovered at the end of the summer and election seasons.

Summer is traditionally a high-demand season for chicken and an extraordinary demand for chicken was experienced recently because of the just-concluded national and local elections.

The broiler producers expressed apprehension over the potential flooding of imports in the next few months which will result in the fall of farmgate prices below their production costs, Palabyab said.

She noted that over and above the 10 million in new chicken imports authorized by the government, there are still some 15 million in unused import quotas under the minimum access volume (MAV).

The Department of Agriculture last week authorized the importation of five million kilos of chicken up to August and a standby import volume of another five million kilos. The move was made to ease the recent tight supply situation and rising retail prices of chicken experienced this summer.

Earlier, Agriculture Secretary Luis Lorenzo allayed fears the importation will adversely affect local broilers. He said the volume represents just one percent of the country’s chicken supply and only about three percent of Metro Manila’s annual chicken demand.

Gregorio San Diego, UBRA President, urged government to focus its efforts on retail prices of chicken.

"Farmgate prices always reflect market forces. Even as farmgate prices decline, retail prices continue to be high. Government is barking on the wrong tree. The imports will hurt producers‚ prices and may not result in lower prices of chicken for our consumers," said San Diego.