Poultry stakeholders assure public of enough supply for holidays

MANILA, Philippines — Despite increased demand due to the Christmas season, the supply of chicken in the market remains sufficient, but poultry stakeholders still see the need to extend the lower tariff rates on major agricultural commodities.

According to American Chamber of Commerce agribusiness committee chairman Christopher Ilagan, there is adequate supply of chicken in the market, with producers capable of meeting demand even amid the seasonal Christmas rush.

However, he admitted that prices across commodities remain elevated. Latest market monitoring by the Department of Agriculture showed that chicken is now priced at P200 per kilogram.

Bounty Agro Ventures Inc. (BAVI), the country’s largest rotisserie chicken company, noted that the price of imported chicken has also gone up to record highs, but is still lower than the local cost of production because other countries have access to reliable and reasonably priced inputs.

BAVI president and general manager Ronald Mascariñas said there is pressure from producers to raise prices because of the record high cost of feed inputs.

Worldwide grain prices skyrocketed during the pandemic and got worse with the Russia-Ukraine war. The two countries are the world’s biggest suppliers of feed wheat.

There is also an estimated 21 percent increase in local yellow corn prices from last year.

“But there is enough production. Frozen inventory is higher this year compared to the same period last year. Demand is down simply because prices of goods and services have significantly gone up and yet minimum wages remained the same,” Mascarinas said.

For Vitarich Corp., one of the country’s pioneers in poultry and feed manufacturing, rising chicken prices even as imports have increased is a reflection that sourcing more supply abroad does not reflect consumer prices.

Vitarich legal counsel Karen Jimeno said the importation of chicken is simply not an effective solution in reducing chicken prices, which are actually mainly driven by the increased cost of inputs.

“The key to stabilizing prices is local self-sufficiency. The Philippines needs to secure its local food supply, encourage local producers to scale, and lower prices of inputs like imported corn,” Jimeno said.

“At the recent PCAFI meeting, it was mentioned that the most yellow corn produced historically is at six million metric tons based on the DA National Corn Program report. Local industries in the Philippines need around eight to 10 million metric tons of yellow corn, so there is clearly a shortage in local corn supply.”

“When we do not control the production and supply of chickens and other commodities, we are at the mercy of external forces and affected by variables we cannot control,” she said.

The poultry stakeholders are backing the move to extend Executive Order 171, which effectively reduces the tariff rate of commodities like corn, and will provide stability and reliability for inputs valuable to the local value chain.

The measure is set to expire by the end of the year and the economic team of the Marcos administration is pushing for its extension especially after inflation rose to eight percent in November amid more expensive food commodities.

The EO, which was implemented by the previous administration, was aimed at addressing inflationary concerns amid high oil prices that already trickled down to food items.

“This is absolutely necessary to keep the cost of production down. Otherwise, a number of producers will go bankrupt with the worsening profit squeeze,” Mascariñas said.

He added that producers are currently unable to pass on to consumers the full cost of increase in production.

“The push to reduce tariffs on production inputs like corn can help put a lid on costs associated with feeds and, in the short term, supporting dependent downstream industries like livestock and poultry,” Ilagan added.

EO 171 lowered the in-quota tariffs on corn imports to five percent from 35 percent.

Jimeno emphasized that EO 171 promotes a stop gap measure for local producers to scale up, manage costs and be competitive.

She added that augmenting corn supply through EO 171 also buys time for local farmers to catch up to the corn demand.

“It is really important for our government to understand the components and supply chain of finished products like chicken when formulating policies,” Jimeno said.