Pork imports may hit 600M kilos this year as traders take advantage of cheap duties

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Metro Manila (CNN Philippines, April 21) – Meat importers are rushing to book orders of frozen pork from abroad for the next three months to take advantage of cheap tariffs announced by Malacañang, an industry group said Wednesday.

Philippine Association of Meat Processors Inc. Director Jet Ambalada said Executive Order 128 and another order to be issued by President Rodrigo Duterte will allow up to 400,000 metric tons (MT) of frozen meat to be shipped to the country subject to a 5% duty - a bargain compared to the previous 30% rate.

Additional shipments will be charged 15% of the declared cargo value, down from 40%. This is in place for three months starting April 7. Agriculture Secretary William Dar said the order subjecting over 350,000 MT of imported meat to the cheapest duties will be "issued soon."

"Right now, my friends in the industry are all rushing to apply to import pork," Ambalada told a webinar organized by the British Chamber of Commerce of the Philippines.

"I think there will be a large bulk of importation taking advantage of EO 128. Depending on what happens in the economy, we believe that it can even go higher than 400,000, it may even reach 600,000 metric tons this year on total importation under what we call the MAV (minimum access volume)," he said.

Meat producers in the United Kingdom are among those interested to supply pork to the country, according to British Chamber of Commerce of the Philippines chairman Chris Nelson.

Pork still expensive

The Meat Importers and Traders Association (MITA) offered an explanation as to why liempo (pork belly) still ranges from ₱370 to ₱420 per kilogram in Metro Manila wet markets even if tariffs have been slashed for two weeks now.

"The importers are carrying inventory that paid 30-40% tariff. We need some time for them to sell off these products unless they are willing to average down their costs so they would diminish their losses," MITA President Jesus Cham told CNN Philippines. "What we need to do now is for the imported carcasses to have unhindered access to the marketplaces."

RELATED: Senators doubt imports surge can pull down pork prices

No less than the President's economic team defended the DA's proposal, with Finance Secretary Carlos Dominguez III telling senators he will take "full responsibility" for the measure aimed at reducing pork prices to benefit Filipino consumers.

"The President's Executive Order to temporarily increase MAV and decrease tariff rates for imported pork will immediately address the abnormally high pork prices caused by the supply deficit," he said in a letter addressed to Senate President Tito Sotto. "This will give some 100 million Filipinos who eat pork, especially the poor, access to adequate and affordable food amid the pandemic."

Senators last week passed a resolution telling Duterte to withdraw the EO, which they saw as a death wish for the local hog industry - something Dar and Dominguez have denied.

But Dominguez said pork supply will still largely come from local producers, with imports expected to cover only 22.8% of domestic consumption. He vowed to make more loans available to hog farmers through the government's Land Bank of the Philippines.

Long recovery seen

Relying on importation to plug local supply gaps will put local farmers at a disadvantage, a group said.

"Sabi ng Presidente, madali lang namang bawiin yung EO. Pero may kasunod: babawiin niya after mag-stabilize 'yung presyo at mag-normal daw 'yung supply ng baboy," Nicanor Briones, vice president of the Pork Producers Federation of the Philippines, said in an interview.

"Three years pang hindi mangyayari kasi wala sa aming magre-repopulate sa ginagawa ng gobyerno. 'Yun ang katotohanan."

[Translation: The President said it's easy to revoke the EO. But there's a catch: he will revoke if after prices stabilize and pork supply returns to normal. It will take 3 years before that happens because no hog raiser will repopulate given the current policies. That's the reality.]

RELATED: 'Easy' to recall EO lowering tariffs on imported pork once local supply stabilizes, Duterte says

Dar said during the webinar that state-run banks have set aside ₱42 billion in loans for commercial hog raisers to repopulate their piggeries, on top of reimbursements for animals culled due to the African Swine Fever outbreak in the country, which caused the narrow supply.

The Bureau of Animal Industry said there were 466,670 culled pigs nationwide due to ASF, with active cases concentrated in 43 barangays in 5 regions. The agency added it is procuring testing machines and RT-PCR test kits to better detect the presence of the virus, which has proven deadly to pigs.