September 15, 2010

Philippine government acts to prevent chicken price hike by December

The Philippine Department of Agriculture (DA) is taking steps to prevent a sharp increase in the price of chicken by December following a move by local poultry growers to cut the production of breeders due to current oversupply of chicken.

Agriculture Assistant Secretary Davinio Catbagan said an oversupply has driven down the price of live chicken from PHP50 (US$1.12) to PHP57 (US$1.28) per kilo, way below the production cost of PHP58 (US$1.31) to PHP62 (US$1.40) per kilo.

He also said the United Broiler Raisers Association (UBRA) claims that in some areas the live price is down to PHP48 (US$1.08) per kilo.

Likewise, the price of dressed chicken has gone down to PHP120 (US$2.71) per kilo from PHP140 (US$3.16) to PHP150 (US$3.39) per kilo. But the DA believes that wet market retailers can afford to bring down their selling price further to PHP90 (US$2.03) to PHP110 (US$2.48) per kilo.

Some local poultry growers have reportedly stopped "loading" or hatching breeder eggs to remedy the current glut.

Catbagan explained that the oversupply stems from the over-importation in 2009 of breeders and the over-importation of chicken through the minimum access volume (MAV) allocation. According to DA figures, MAV utilization as of Aug. 31 was at 72 percent.

The yearly MAV allocation, Catbagan said, is 23,590,000 kilos.

Last year, he said, total MAV allocation utilization was 92 percent.

Catbagan said there are some six million kilos of chicken in cold storage facilities.

Gregorio San Diego, president of UBRA, places the figure in cold storage at 6.5 million, more than double the three million that was in storage last year.

The DA is setting a meeting with local poultry industry leaders and stakeholders to discuss how they can manage their production and MAV allocation to correct the current oversupply without compromising the production for December.