MANILA, Philippines — Poultry industry stakeholders said government should encourage higher production of chicken through policy interventions to manage supply and stabilize prices.
Bounty Agro Ventures Inc. (BAVI), the country’s largest rotisserie chicken company, said among the policies of the National Economic and Development Authority is to accelerate the release of chicken supply in cold storage warehouses to push up inventory circulating in the market.
BAVI president and general manager Ronald Mascariñas said such a move is a necessary government intervention to stabilize supply and price, pointing out that there is an imbalance in supply of chicken in different provinces.
“While there is adequate national supply, some areas like Central and Western Visayas and Southern Mindanao are short of supply,” Mascariñas said.
“These areas are still reeling from lost production facilities due to Typhoon Odette and are therefore dependent on shipment of supply from other areas,” he said.
He noted that entry restriction for chicken issued by several local government units due to incidence of bird flu in some areas is compounding the supply shortage in certain areas and thus resulting in higher prices.
American Chamber of Commerce Agribusiness Committee chairman Christopher Ilagan said market forces should dictate the levels of inventory and inventory turnover in cold storages have gone past the supply chain disruptions experienced at the peak of pandemic mobility restrictions.
He noted that the proposal to accelerate the release of inventories in cold storages begs the question if there are bottlenecks on the regulatory side that keep current inventory flows from moving.
“Certainly, the government must abide by its regulatory processes for such releases and speed must not be sacrificed for food safety and quality, but it should always aspire to be as efficient as possible in these regulatory processes to the extent that it can,” Ilagan said.
“Regulatory processes are transaction costs that should be reduced to the highest extent they can under all circumstances – be they good times or more difficult times – to ensure efficient movement of goods and more efficient markets,” he said.
United Broiler Raisers Association (UBRA) president Elias Jose Inciong, for his part, said chicken supplies are now moving as prices are high.
Market monitoring from the Department of Agriculture showed that chicken is currently priced at P180 per kilogram.
Inciong explained that there is a temporary increase in demand due to the election season but after the May polls, demand will return to normal, thus, lower prices.
Apart from pushing up inventory, the government is also considering the reduction of tariffs for corn imports which are primarily used as feed for poultry and livestock.
The government wants to lower the most favored nation tariff rate to five percent in-quota and 15 percent out-quota and allow a minimum access volume where importers can avail of the four million MT until the end of the year.
Mascariñas argued that there is a serious shortage of feed wheat due to the Russia-Ukraine conflict. Ukraine supplies over a quarter of the wheat being traded.
“Alternative energy source is corn. Reduction of the corn tariff will temper the high cost of imported corn,” Mascariñas said. The corn sector will cry foul but temporary reduction of corn tariff is for the greater good,” he said.
Vitarich Corp., one of the country’s pioneers in poultry and feed manufacturing, seeks to make chicken the most affordable protein but are asking for assistance in getting affordable and accessible inputs all year round as the main ingredient of feeds is corn.
“We support NEDA’s move to request for five percent tariffs for four million MT of imported non-ASEAN corn in the MAV quota. Corn feed make-up almost 70 percent of the cost to raise chickens so lower tariffs for corn will really help hamper further possible inflation of feeds,” Vitarich legal counsel Karen Jimeno said.
However, Inciong said the economic team may not have checked the international prices of corn when they proposed such a measure.
Commodity prices in the international market are all on the upward trend due to global tensions.
This means that higher corn prices could also impact meat inflation, as they are major animal feeds while prices of domestically produced crops may start to drift higher due to rising costs of farm inputs, such as fuel, seeds and fertilizers.
Data showed that prices of imported corn may reach P26.40 per kilo even with the zero tariff due to high prices in the global market. So this does not threaten local farmers with displacement as local prices which range from P21 to P22 a kilo making the local corn producers cheaper and competitive. With demand for corn more than local supply, farmers need not worry as local producers will continue to buy local corn as long as it is affordable and accessible all year round and stable in quality.