Spiking herring costs push sardine prices up

CEBU, Philippines - The spiking cost of tamban or herring has prompted several brands of canned sardines to increase their suggested retail prices.

Based on the memorandum from the Department of Trade and Industry,Tung Chingco Manufacturing Corporation and Maunlad Canning Corporation have to raise the SRP of Ligo and Young’s Town canned sardines in tomato sauce (155 grams) effective on March 13.

Considered to be the major ingredient of canned sardines, it was also presented that tamban has a percent contribution of 32.54% for Ligo and 48.38% for Young’s Town in the total production cost that caused the price movement.

From the old SRP of P12.80 for both brands, the retail price has increased to P13.45 and P13.20 respectively which is correspondent to its price change of 5.08% for Ligo and 3.13% for Young’s Town.

DTI- Cebu Chief Trade and Industry development specialist Zaide Bation said that for the whole month of March, all prices for basic necessities and prime commodities have remained stable amid the oil price hike except for the particular brands of canned sardines affected by the price increase of tamban.

She added that upon receiving the memorandum informing them regarding the suggested SRP increase, DTI representatives shall check the validity of the reason of the price movement and directly probe the manufacturer’s supplier or source of the product’s components on how it can affect the end product.

They are also responsible, Bation noted, in examining the effect to its actual price by conducting their own computations of the retail price flow if it would match the proposed price increase of the manufacturers.

She added that such process is tedious and the government agency is trying its best efforts in negotiating the dynamics of the prices with the manufacturers and distributors.

“As much as possible, kun mahimo namo i-maintain nga stable ang prices, manghangyo mi mismo sa mga manufacturers nga ipa-hold lang usa ang price increase,” Bation stated. (“As much as possible, if we can retain the prices to be as stable as they are, we would request the manufacturers to hold their recommended price increase.”)

Noting that the SRP increase for canned sardines will greatly affect the retailers, she hopes that other manufacturing brands won’t also raise their prices for it will certainly have a domino effect to the consuming public.

As a way of saving money, Bation advised the consumers to purchase such products from those who have direct sources from the distributors or the manufacturers since there could be a tendency that prices would be double if it would be bought from indirect retailers who intends to still have reasonable profit after all. However, she said, it still depends on them (consumers) to exercise their right to choose.

Based on the general commodity profile of DTI for canned sardines, local fish or the raw material represents 33% of the production cost which is next to tin can and other packaging materials that runs to 43%.

Other factors comprising the retail price of canned sardines are tomato paste and other seasonings (imported and local) which is 8%, labor and manufacturing overhaul for 4% each, administration and selling expenses for 3%, 2% for both electricity and fuel and financial charges or interest cost which is 1%.

In addition, DTI records show that Jolo is a primary fishing ground in the country for tamban sources which are then unloaded in Zamboanga and Manila.

Earlier reports stated that the lifting of the three-month ban on fishing for fresh sardines by the Bureau of Fisheries and Aquatic Resources prompted several canneries to increase their prices.

From December 2011 to February this year, the government imposed a “closed season” for tamban fishing to give ample time for sardines to brood and multiply for the fishing operations which started back last month.

According to the law of supply and demand, the suspension of operations for canneries and fishing fleets has also affected the price movement of canned sardines nationwide. (FREEMAN)