May 27, 2004

Philippine Chicken Import Plan May Depress Local Prices
 
The Philippine government's plan to import 5 million kilograms of chicken meat could unduly depress local prices to the detriment of poultry raisers, an industry official said Wednesday.
 
"We will be in a tight bind. The planned imports, if these materialize, will come at a period of low demand for chicken and increased output by broiler producers. This twin development may cause a significant drop in prices. Worse, the expected collapse in prices will happen at a time when the cost of feed ingredients is at an all-time high," said Tatish Palabyab, president of the Philippine Association of Broiler Integrators.
 
The Department of Agriculture has authorized the entry of 5 million kilograms of chicken meat for arrival between July and August to ease the tightness in supply and retail prices of chicken.
 
She said even without the imports, local farmgate prices have started softening. From a high of 71 pesos ($1=PHP55.98) a kilogram this past summer, prices had fallen to PHP65-PHP68/kg as of Tuesday due to slackening demand following recently concluded national elections.
 
Demand was unusually high this past summer due to local and national elections, she said. Food demand surges during campaign periods due to election-related festivities.
 
On the other hand, feed costs have remained strong since the start of the year, she said.
 
Citing figures from the Bureau of Agricultural Statistics, she said the price of local corn has risen to over PHP11/kg from an average price of PHP8.71/kg in 2003.
 
"We respect the prerogative of the government to authorize imports in order to stabilize supply and prices. But the government should also watch sensitively production developments in order to put a lid on imports if local production does normalize in the next few weeks," she added.
 
Local prices of chicken rose to PHP120/kg around two weeks ago from PHP90-PHP95/kg a month ago, due to tightness in supply.
 
In addition to the strong demand prior to the elections, the tight supply is also attributed to a shift in consumer demand, as pork prices have remained high following a bird flu scare early this year.