Pork industry warns of lost pricing leverage if imports expand

HOG RAISERS said plans to expand pork imports may actually result in higher pork prices if supplier countries gain leverage on pricing when the Philippines signals a high degree of dependence on foreign produce.

“We could be giving the wrong signal. From 54,000 (MT), naging 400,000 (MT) kailangan natin… (we indicated demand of over 400,000 MT). We will not be surprised if pork import prices rise from $1.50 per kilo to $2.00-$2.50,” according to the National Federation of Hog Farmers, Inc. President Chester Warren Y. Tan, who was speaking at a joint hearing Thursday of the House Committee on Agriculture and Food and the House Committee on Trade and Industry Thursday.

He was referring to the Department of Agriculture’s (DA) proposal to expand the minimum access volume (MAV) quota for pork imports to 404,000 metric tons (MT) from the current 54,000 MT, in order to raise the supply of pork after domestic growers saw their herds diminished by African Swine Fever.

The DA is also proposing to lower tariffs on pork imports to 5% for quantities within the MAV quota and 15% on out-of-quota volumes over six months. The current settings are 30% and 40% respectively.

Mr. Tan said the DA should actually increase tariffs “so we can compete on a level playing field.”

Samahang Industriya ng Agrikultura Chairman Rosendo So said at current tariff settings, importers are still profitable, and added that their profits will rise further if tariffs drop.

He added that the government will be disadvantaged by a lowering of tariffs because it will collect less revenue.

“Makakakolekta pa rin tayo ng P12 billion… Kung ang taripa ay binaba sa 5%, ang makokolekta lang natin ay P2.8 billion (We can collect P12 billion from current pork tariffs… If they are lowered to 5%, we will only collect P2.8 billion),” he said at the hearing, using Bureau of Customs (BoC) estimates of pork import prices.

The DA has estimated pork import prices on a per-kilo basis at $3. The BoC estimate is $1.70. — Gillian M. Cortez