March 23, 2004

Philippines Food Processors Hit By High Pork Prices

Operations of food processors in the Philippines have been severely curtailed by high pork prices caused by a severe shortage of live hogs.

The Philippine Association of Meat Processors (PAMPI) said that several of their members have had to scale down operations since January as a result of the hog shortage.

"Pork prices have skyrocketed to P150 to P160 a kilo in the wet market, which is over P50 a kilo more than their prices last year," Francisco Buencamino Jr., executive director of PAMPI said.

"How else can PAMPI members absorb these high costs so their option is to reduce their processing line. They just cannot continue passing on the higher cost to consumers because there is a limit to what the market can absorb," he said.

CDO Foodsphere Inc. president Jerome Ong confirmed this, saying his company is fortunate enough to be able to source from its regular and stable suppliers.

"What about the rest which do not have farm tie-ups? They have no choice but to reduce their production shifts or increase the prices, a very unpalatable decision to make," Ong said.

Consumers, he said, have also felt the tight supply and have shifted to other protein sources like chicken and fish, which because of shift increases in demand are also now experiencing tightness and a concomitant higher prices.

"Poor consumers, they either have to make do with higher prices or shift to canned meat that PAMPI members are producing. Otherwise, for the poorest members of society, the shift is towards noodles, which are not nutritious but can fill the stomach," Ong said.

The escalating pork prices and their tight supplies were traced to the high cost of farm inputs (principally feeds like yellow corn) which forced hog raisers to reduce production in the past months. The hog raisers, especially the backyard growers, have been asking the government for zero tariff on feeds to enable them to realize profits from their operations.