November 18, 2019

Philippines poultry body maintains 2019 growth target at 5-10%

A poultry farmers association in the Philippines has kept its growth target for this year at 5-10%, as prices rose due to a shift to chicken consumption prompted by the African swine fever (ASF) outbreak in Luzon, the Philippines.

However, the key challenge to any farmer;s expansion is getting finance, said United Broilers and Raisers Association (UBRA) president Elias Jose M. Inciong in a phone interview.

"Historically, the expansion potential is 5% to 10% depending on financing capability… Small and medium-sized players, because of limitations in financing, can achieve a maximum of 5%," Inciong explained.

According to the Philippine Statistics Authority (PSA), the chicken industry made up for 14.72% of the overall value of agriculture output, equivalent to P25.941 billion (US$513 million), in the third quarter.

In the third quarter of 2017 and 2018, the industry accounted for 13.27% and 13.96%, respectively.

Volume of production grew 8.48% to 465,150 tonnes during the third quarter of 2019.

The increase in poultry production is attributed to rising demand as consumers shift from pork to chicken due to the ASF outbreak.

"There is an improvement in the price because of the shift in demand and also there is a increase in the volume of chicken… and that would account for the growth," Inciong said.

But he warned raisers to be cautious in expanding production since the shift in demand may later be reversed. A chicken glut is possible if high prices attract excessive expansion.

The average price of chicken has been above P100 (US$1.98) per kilo as the ASF scare escalated in September. Based on the weekly price monitoring of UBRA, as of November 8 the average price of regular-sized chicken was P111.50 (US$2.20) per kilo, down 0.44%, week-on-week. The price of prime-sized chicken was P112.21 (US$2.22) per kilo, down 0.7%, week-on-week.

Inciong also warned of increased chicken imports because of a government inflation-control policy that encourages keeping prices low.

"The government has decided that importation is a priority (over) production and therefore, we expect because of this increase in prices, we expect the government to again help importers, supposedly to help the consumers," he said.

According to the Bureau of Animal Industry (BAI), chicken meat imports rose 11.4% to 200.29 million kilos in the first eight months of the year. Imports peaked in January at 30.28 million kilos, followed by August, worth 28.58 million kilos.

- BusinessWorld