September 8, 2022

 

Pork prices in the Philippines continue to rise

 

 

MUFG Global Markets Research said pork prices in the Philippines continue to rise due to the ongoing African Swine Fever (ASF) outbreak, cost of livestock feed going up, and increased fuel prices, BusinessWorld reported.

 

In a report, MUFG Global Markets Research analyst Sophia Ng said that rising pork prices would keep inflation high in the nation.

 

In addition to higher energy inflation, she said food inflation has been the main driver of overall inflation in the Philippines since early 2020, and food inflation itself has been primarily pressured by higher prices of meat and fish.

 

Adding 1.4 percentage points (ppts) on average in the first seven months of 2022, according to Ng, food inflation is still the main driver of overall inflation, followed by transport prices at 1.2 ppts. Fish and meat prices contributed 0.4 ppts each to overall inflation so far this year.

 

Given that pork is one of the most popular meats consumed per person in the Philippines, she said that a significant portion of pork prices would fall under the meat category.

 

Aside from ASF, rising animal feed costs—caused by the Russia-Ukraine war, which disrupted the world feed wheat supply—have also had an impact on pork prices. Due to the increase in fertiliser prices, the cost of corn, which is used as a substitute, has also increased.

 

Ng said farmers also pay more for transportation due to the increase in pump prices.

 

In June, the price of swine raised in backyard farms for slaughter reached a record PHP 186.54 (~US$3.26; PHP 10 = US$0.18) per kg, and it is anticipated to rise even further.

 

She said farmgate prices of hogs for slaughter in backyard farms will remain high, possibly between 14-18% year over year in the second half of 2022, up from 12.2% year over year in the first half of 2022 and a 39.1% year-on-year increase for the entire year of 2021 due to the ongoing supply deficit of pork caused by the prevalence of the ASF, with recovery still a long way off.

 

The local swine population has decreased by 4.5%, from 9.9 million at the beginning of 2021 to 9.4 million as of January 1, as a result of the ASF outbreak.

 

Ng said the supply of pork is anticipated to remain low this year. She cited the National Economic and Development Authority's (NEDA) prediction of a 65,800 metric tonne deficit in the supply of pork, adding that prices were largely unaffected by the government's decision to lower tariffs in order to increase imports of frozen pork.

 

She said given the current trend, total pork imports this year are probably going to surpass those seen in 2016. However, this won't significantly lower pork prices because traders will continue to raise prices by taking advantage of the low domestic supply. Additionally, the ongoing ASF hinders farmers' efforts to increase pork production.

 

-      BusinessWorld