March 13, 2007

Poor demand to cut Philippine poultry production
 

Poor consumer demand and high cost of feed materials such as corn and wheat will lead to a decline in Philippine poultry production this year, a senior industry executive said Monday (March 12).  

Industry participants had initially hoped poultry production this year would see a recovery and reverse a declining trend seen in the past two years, attributed mainly to poor purchasing power among consumers.  This had led trade players to set a 5 percent production growth target for 2007, from last year's output of 456 million heads, in anticipation of improved demand ahead of local and national elections in May.  

However, poultry production this year could eventually decline if poor consumer demand continues to persist, said Gregorio San Diego, president of the United Broilers Association of the Philippines.  Contrary to expectations, local demand for chicken isn't showing signs of any improvement although the political campaign for national elections is already in full swing, San Diego said.   Traditionally, campaign sorties cause a spike in food demand. However, politicians running for various public offices have apparently opted to put their campaign money in advertisements, rather than in public gatherings, he said.  

San Diego said the selling price of local broiler chicken is currently hovering around 56 pesos($1=PHP48.53) a kilogram, liveweight at farmgate level, against a production cost of PHP59/kg, stressing poultry integrators are operating at a loss.   

According to San Diego, the influx of imported poultry products also continues to damp demand for locally produced meat and other products as it is cheaper because of its lower production costs.  

Even at a 40 percent tariff, the landed price of imported chicken parts hovers around PHP30/kg, while retail prices of chicken range between PHP85-PHP100/kg, said San Diego.  

He stated in 2006, for instance, chicken imports surged 40 percent to 32 million kilograms, he said. As local prices are likely to remain high, chicken imports could rise even further, he said, adding huge volume imports should not include smuggled products.   Chicken imported by the Philippines mostly comes from the United States, Brazil and Canada.