June 29, 2011
 

Philippine government suspends suggested retail prices for chicken

The Philippine Department of Agriculture has suspended the suggested retail price (SRP) for chicken on June 28 on expectations that the market will be flooded with the produce in the coming weeks.

Agriculture Secretary Proceso J. Alcala declared the suspension of the SRP, saying the government will let the market forces dictate the prevailing price of chicken and that prices should have been lower by now.

Industry representatives from the United Broiler Raisers Association pointed out that the SRP should only be implemented during times when supply is low or when the country or a particular area is under a state of calamity.

Stakeholders from the poultry industry pointed out that there is an oversupply of day-old chicks and that this would mean more chicken inventory in the coming months.

Poultry growers lament that when the SRP is in place, some venders tend to "abuse" the scheme by selling the produce at the suggested price even if the farm-gate price is low.

In September 2010 the DA, poultry raisers and market venders agreed on a "standard reference price" of PHP100 (US$2.29) per kilogram for "unbranded" dressed chicken and P100 for "branded chicken." This, after the price of dressed chicken reached PHP120 (US$2.75) per kilogram at the time.

Currently, retail prices of dressed chicken are ranging from PHP115 (US$2.64) per kilo to PHP150 (US$3.44) per kilo.

As of June 21, the inventory of frozen chicken meat was at 7,642 tonnes, of which more than 4,000 tonnes were imported. During the same period last year, the inventory of frozen chicken is pegged at 7,916 tonnes of which 7,151 tonnes are imported.

Importers bring in chicken under the minimum access volume (MAV). Republic Act 8178, or the Agricultural Tarrification Act, refers to MAV as the volume of a specific agricultural product that is allowed to be imported with a lower tariff as committed by the Philippines to the World Trade Organization under the Urugay Round Final Act.

The duty for chicken imported under MAV is at a uniform rate of 40 percent for volumes within MAV and outside MAV. But Manila invokes a special safeguard wherein importers would have to pay additional tariffs for imports coming in at less than the trigger price of PHP93 (US$2.13) per kilo.

Earlier, the National Price Coordinating Council said the SRP is merely a reference for consumers to ensure that they are buying products that are reasonably priced. The government cannot control prices.

Meanwhile, the government said it will no longer allow the special importation of chicken as estimates suggest that production will be enough to meet the demand of consumers even during the holidays.