How the government can lower pork prices
Two years after the deadly African swine fever (ASF) was first detected in a backyard pigsty in Rizal, swine disease continues to threaten the country’s livestock sector. As epidemics have subsided in recent months, the entire country cannot yet breathe a sigh of relief (See, DA reports decline in ASF outbreaks, in BusinessMirror, June 8, 2021). We cannot let our guard down yet, because it is enough for epidemics to reappear, it is just a careless trader transporting infected pigs to slaughterhouses.
The lingering threat of deadly swine disease has put pressure on food inflation since January, when pork prices soared to more than 400 pesos per kilogram in some wet markets in Metro Manila. In August, Socio-Economic Planning Secretary Karl Chua said pork remained expensive due to “production problems” caused by ASF. (See “Pork prices remain high due to ASF – Chua”, in the Business mirror, August 26, 2021). This is despite the fact that the government has already lowered tariff rates for imported pork in order to temper soaring pork prices.
What has compounded the country’s pork supply problems is the container crisis, which has delayed the arrival of shipments and precipitated an increase in shipping costs. Discussions on purchasing imported pork took place in February, and the president approved the measure in April, when the executive decree lowering tariffs on pork was released. Around the same time the OE was published, importers and exporters experienced delays in their shipments due to the container crisis and worsening congestion at global ports. (See “Shipment Charter Rates Up 65% in Second Quarter, Food Importers Suffer,” in the Business mirror, May 24, 2021).
The reimposition of the toughest quarantine restrictions also delayed the arrival of pork imports into cold stores (See “Imports increase pork inventory in October-NMIS, in the Business mirror, October 18, 2021). This inflated the stock of pork in local cold stores, especially in the National Capital Region. To reduce inventory, the Cold Chain Association of the Philippines has urgently proposed lifting restrictions and selling imported pork to areas outside of Mega Manila.
The arrival of more imported pork in the coming months would make it difficult for local traders to find cold storage facilities for their shipments. Of the record 83,469.53 metric tonnes of pork inventory as of Oct. 1, the National Meat Inspection Service noted that 97 percent had been imported. Cold stores in NCR, Regions 3 and 4-A accounted for almost 84% of the total.
The easing of strict quarantine restrictions coupled with the expected increase in demand during the holidays could lead to a further acceleration in pork prices. It would be good for the government to remember that in February the price of fresh pork sold in areas outside the NCR jumped 53% year over year. Allowing the sale of imported pork outside of the National Capital Region could help dampen inflation and give low-income families in other areas a chance to enjoy cheaper pork during the holidays.
Image courtesy of Ed Davad