Business

El NiÃ±o - the culprit

June 5, 2010 | 12:00am

First, some inputs from the consumer front.

It looks like the price of chicken is bound to go up this year. We talked with Mr. Gregorio San Diego, president of the United Broiler Raisers Association (UBRA) and he virtually confirmed it.

What happened was, sometime last year there was a shortage of supply of chickens in the market. The government reacted by importing some eight million kilos of chicken in the last quarter, thereby flooding the market. It was the Christmas season anyway, so the market could definitely absorb some extra supplies. However, the excessive amount spilled into the first quarter of 2010. The surplus depressed the market price, so some chicken growers deliberately cut down on production.

With the surplus in the market, farm gate price was at P60/kilo earlier this year, and chicken was retailing in the open market for P120-130. With production now much less, the demand has driven the farm gate price to P80/kilo and the wet markets and groceries retail between P130-135. The growers explained that the delayed harvest (delayed maturity of the birds) due to excessive heat left them with no recourse but to up the prices.

The chicken growers are quite happy now because they have somehow recovered on the farm gate prices. However, they are still apprehensive on two fronts: first – El Niño is severely affecting the poultry so that the chickens, suffering from excessive heat, are smaller and weigh much less even at maturity; second - there is a perceived shortage of corn which accounts for at least fifty per cent of chicken feed. The low corn supply will definitely mean higher production cost, hence higher retail prices for chicken.

Still on the residual effects of El Niño — sugar supply is also low for this year.

The Philippine Sugar Millers Association Inc. (PSMA) reported that in 2000, their highest production stood at 2,455,000 metric tons. Two years later, this production stood at a low 1,510,000 metric tons. By this year, production is expected to be low also—1,970,000 MT.

As a result, the sugar authorities and the country’s sugar millers have had to allocate the remaining one million MT of sugar strictly for domestic consumption, or we will be forced to import heavily again. As things stand, we are set to import 150,000 metric tons of sugar to ensure enough stocks for 2010 and to be able to serve the US quota.

Apparently, two factors caused this very low supply — El Niño (again!) which affected production, and an unforeseen rise in demand for sugar for local consumption. According to PSMA president Archimedes Amarra, the demand rose by 35 percent this crop year compared to last year. A sugar crop year is from Sept. 21 to Aug. 30. The sugar industry was complacent with its carry-over stocks of 400,000, but the surge in demand, quite unprecedented at 35 percent, severely depleted their stock, causing a shortage.

This crop year, they estimate production of 1,970,000 metric tons only. Our US quota which we need to serve as our commitment to Uncle Sam is 137,000 MT, but this is already covered by our current stock. By this time, the last shipment of 24,000 MT to the United States should be out already. The United States, though, is asking for more sugar to be exported to them, but the industry cannot accommodate their request this time. Our domestic needs have to be served first.

The PSMA is expecting stable sugar prices in spite of the shortage. Mr. Amarra says that primarily, the price of sugar is determined by three factors: supply, the volume of sugar smuggled into the country, and the stability of sugar prices in the world market. Apparently, the political unrest in Thailand has disturbed the prices a bit, though our local sugar millers think that our stable prices will remain. They assure us there will be no severe fluctuations in the price of sugar locally.

More on the gun ban

The loud whispers of a protracted gun ban, even after the prescribed period, have stirred quite a hornet’s nest among our responsible gun owners. Text messages have been flying wildly about this, and the different groups belonging to this sector have formed a coalition for a united stand against the unpopular move and discuss the possibility of a lawsuit should the protracted gun ban push through.

The group met last June 1 at Club Filipino, site of many historic events, and the different members, all professionals, many of them meeting each other for the first time, echoed a unified sentiment during the meet: the gun ban favors only the lawless. As one of the members present that day said, “Only the criminal elements will benefit from the gun ban. Only outlaws will have guns.” That was said verbatim by a Quezon City prosecutor who said that in his line of work, the right to self-defense cannot be overstated. He puts his life on the line whenever he prosecutes lawless elements, and the gun ban only empowers these criminals while rendering law-abiding citizens like him totally defenseless while out in the streets.

Another outspoken member of the group, Atty. Raul Reyes pointed out that everyone in the group, being responsible gun owners, are law-abiding citizens who towed the line during the prescribed gun ban, but the criminal elements apparently have not heeded the call, based on newspaper accounts of indiscriminate killings during the election period. He urged private citizens to exercise their right to self defense and be heard through this coalition of responsible gun owners.

The local gun manufacturers were also there. Armscor, which has been in the business since 1941, pointed out that during the gun ban, when there was very little business coming in, they kept their employees on full time, mindless of the big dent on their profits for the year. Like other legitimate gun manufacturers/exporters/importers, they contribute a big share to the country’s economy through employment (by the thousands) and export earnings. The six-month gun ban has severely affected their operations already, and their sales are down by 60 to 80 percent. By November, when we will hold local elections again, another gun ban stands to be imposed. For the year, this will make a total of eight months of total gun ban for the country.

Still another member (whose name escapes me now) pointed out that the Philippines is a proud home of many champions in the sport of shooting. We have, as a country, grown in leaps and bounds in this international sport, and imposing a total gun ban at this point will radically cut short our competitiveness in this sport.

Ms. Gina Angangco of Armscor suggests that, rather than a total gun ban, the PNP should intensify its efforts at controlling the loose, unlicensed firearms across the country. The latest PNP drive netted thousands of unlicensed guns, and it was a good exercise. More follow-up drives such as this last one would be good for the country, especially for law-abiding citizens. A total gun ban is not the answer. As Gina says, “An armed society is a polite society.”

The industry, though, plans to go through with their annual gun shows in July and November at the Megamall, if only to recover a little from the excessive losses they suffered during the last election. We’ll keep you posted on the dates.

Change of Schedule

The first time Motoring Today, the most comprehensive motoring TV news and features magazine went on the air on what was then known as PTV 4 was in June 7, 1987. It was the first of a series of long-running alternative developmental television programs that STV, Sunshine Television ventured into, which was followed 4 years later in 1991 by Business & Leisure, a business and lifestyle TV magazine aired first on ABS-CBN Channel 2 and in 1998 by Auto Focus, the Philippine Motor Show on television dedicated exclusively to the automobile and the auto industry also then on PTV 4.

This Sunday, that means tomorrow or a day before Motoring Today celebrates it 23 years of telecast and uninterrupted, dedicated service to the general motoring public shall air at 12 o’clock noon on the Solar Sports Channel, a change from its usual 4 o’clock mid-afternoon airing.

Many present professionals (doctors, lawyers, engineers, accountants, etc.) were still in their elementary or high school when they started watching Motoring Today, now considered by many as an institution on Philippine television not only for its staying power of more than 2 decades of broadcast but also for its continuing service to the public through its weekly driving and auto maintenance tips, road safety reminders, discussion of significant topics that are of vital concern to the public, motor sports coverage, etc.

To all the loyal viewers of Motoring Today, again a reminder that it now airs at 12 noon, still on a Sunday on Solar Sports on the Global-Destiny Cable Network and soon again on the Sky Cable Network and “Happy 23^rd Anniversary to all of us!”