Mixed trend in imports of chicken, pork seen

MANILA, Philippines — The Philippines is expected to buy less chicken this year amid weak demand, but its pork imports are still seen to rise as the African swine fever continues to pull down local supply.

Based on the latest report of the United States Department of Agriculture- Foreign Agricultural Service, the Philippines is seen importing 250,00 metric tons (MT) of pork meat this year, up 13 percent  year on year.

USDA lowered this year’s forecast from the earlier 280,000 MT amid lower imports in the first five months.

Pork imports from January to May 2020 declined by 40 percent due to a combination of high global pork prices, congestion at the Port of Manila, lack of cold storage space, and plummeting demand from hotels and restaurant institutions following the pandemic.

“Due to the anticipated pork shortage, however, we expect imports to pick up in the second half of the year to supplement local supply. Consumption of pork is also seen to firm up as the economy begins to reopen and lockdown restrictions are gradually lifted,” USDA said.

Domestic production will decline 15 percent to 1.35 million MT.

The Department of Agriculture reported that around 298,844 pigs were killed since the outbreak started in August 2019.

“A larger drop in inventory numbers is expected in the third and fourth quarter of 2020. Second quarter a slight contraction. There is a shift from backyard to commercial operations as backyard inventory declines, while commercial farms expand,” USDA said.

Meanwhile, consumption was also forecast to drop by 11 percent to 1.59 million MT.

The Philippines, on the other hand, is reducing its chicken meat imports by 4.37 percent to 350,000 MT.

Import projections have also been adjusted downward as a reflection of the drop in overall demand.

Local production will only increase by 3.44 percent to 1.5 million, while domestic consumption is seen to rise to 1.85 million MT.

“Due to record low farmgate prices in the second quarter caused by the COVID-19 quarantine restrictions and temporary closure of food outlets, chicken production is still seen to grow this year, but at a slower pace,” USDA said.

Chicken meat imports from January to May increased 50 percent from the previous year. About 65 to 70 percent is composed of mechanically deboned meat (MDM) used for meat processing and is not locally produced.

There are 175 meat processors in the country, which together produce about 600,000 MT of meat products worth around P90 billion annually.

The meat processing industry, which has been growing by an average of 10 to 15 percent per year, sources about 85 percent of its raw materials from abroad.

Further, imports of chicken leg quarters and other chicken cuts grew significantly in the early months of the year due to robust demand from the hotel, restaurant, and institutional sector for these products.

The bump in imports during the first three months of the year was also partly caused by delayed arrivals of shipments due to global shipping problems in late 2019.

Stocks of both imported and domestic chicken meat in cold storage warehouses have now started to come down as the economy starts to reopen and more food outlets begin to operate.