Chicken supply adequate amid Russia-Ukraine war

MANILA, Philippines — The domestic supply of chicken is enough to withstand the possible impact of the ongoing Russia-Ukraine tension on the prices of the commodity, local poultry producers said.

In a statement, the United Broiler Raisers Association (UBRA) said while demand has yet to go back to pre-pandemic level even as the economy has reopened, the government has laid out proposed measures to cushion the impact of the war.

For chicken, the economic team called for the quick release of supply from cold storage warehouses to push up inventory, on worries over demand being tempered anew as consumers have to deal with soaring prices of fuel and other commodities.

UBRA said demand is “still very far” from pre-COVID levels and hotels and restaurants are just starting to slowly come back.

UBRA president Elias Jose Inciong said consumers remain cautious especially with the war impacting commodity prices, particularly petroleum products.

“COVID-19 is slowly going away but prices are so high that people do not want to go out,” he said.

He assured consumers, however, that supply is enough especially after the industry had a miscalculation and increased their breeder capacity in anticipation demand would have recovered by the last quarter of 2021 until the first quarter of this year.

Last year, chicken imports reached 404,711 metric tons. Currently, ready stock is at 12,327.64 MT in local chicken, enough to last with or without the Ukraine-Russia crisis.

Bounty Agro Ventures Inc. (BAVI), the country’s largest rotisserie chicken company, noted that demand has yet to fully pick up and Metro Manila, which contributes a third to the overall economic output, is still the weakest area.

BAVI president and general manager Ronald Mascariñas said this could be attributed to the economic condition in the capital where many people lost their jobs following closures of businesses.

“But our production and breeding stocks are secured for the next 18 months,” he said.

American Chamber of Commerce Agribusiness Committee chairman Christopher Ilagan noted that consumers’ optimism is being dampened by the Ukraine-Russia crisis.

He said it is eating on the budget of many households, which could mean less time to spend dining out.

Another measure the government is considering to help soften the blow of high prices is the reduction of tariffs for corn imports, which are primarily used as feed for poultry and livestock.

The government wants to lower the most favored nation tariff rate to five percent in-quota and 15 percent out-quota and allow a minimum access volume where importers can avail of the four million MT until the end of the year.

“This is just temporary to ensure that we have adequate feeds so that we can buy pork and chicken at a cheaper price,” Mascariñas said.

Mascariñas said he supports the proposal, citing its benefits for producers especially as the costs of raw materials are already high even before the war, largely due to the effect of the pandemic and its restrictions.

He emphasized that it is necessary to look at the bigger perspective and what would benefit producers and consumers alike.

Vitarich Corp., one of the country’s pioneers in poultry and feed manufacturing, echoed the same sentiment, saying poultry producers must be allowed to import what is necessary and what the local farmers cannot provide.

“We hope to get five percent tariffs for four million MT of imported non-ASEAN corn in the MAV quota. Corn feed make-up almost 70 percent of the cost to raise chickens so lower tariffs for corn will really help lower the prices of chickens to consumers,” Vitarich spokesperson Karen Jimeno said.

Ilagan added that rather than importing the finished product, it is better to import the inputs to generate value-adding.

Inciong, for his part, emphasized that the government will unlikely touch the tariffs for chicken because supply is moving, unlike with pork imports before that were stuck in cold storages.

“The inventory is moving especially now that they opened up [the economy]. It is being bought, unlike with pork that inventory is still high and is not being released,” Inciong said.