Paul A. Anderson General Manager South East Asia/ International Sales Manager, Genesus Inc.
The average market price of regular slaughter hog drastically went further down in the month of September 2021. As of this writing, the average September price was 140 PHP per kg (2.74 USD) while that of culled sows is at 75 PHP per kg (1.47 USD)
source: PROPork weekly price monitoring
On the other hand, the price of key feed raw materials keeps on going up. Yellow corn is priced at 23.50 PHP/kg (0.46 USD), feed wheat is at 21.00 PHP/kg (0.41 USD), soybean meal is 28.00 PHP/kg (0.55 USD), coco oil is 68 PHP/kg (1.33 USD). Given what is happening in the local industry, producers are losing a lot from their operations
|Reg Slaughter Hogs (LW) PHP/kg||171||159||140|
|Culled sows PhP/kg||99||84||75|
Key reasons for the downtrend are the following:
1. Imported Pork
Aside from the cyclical phenomena on pork prices at this time of the year, the pressure from huge amounts of imported pork has kicked in. These cheap imported pork products have found their way into the traditional wet markets thus cannibalizing the locally produced pork.
2. Disposable Income
The rice harvest season has begun! But with low buying price, which by the way is even lower than the productions cost, disposable income in the countryside will be lesser as compared to the previous year’s thus having a negative impact on the pork consumption.
Cashing in of pigs in areas that are now suspected to have a resurgence of ASF cases. As observed in the past, once there is a reported or suspected ASF case in a certain area, the farmer/producer would dispose of his stocks at lower than the going prices in the area thus pushing the prices down.
4. COVID 19 Related Issues
Lockdowns and uncertainties forced people to hold on to their money and prevented people from buying excessively
The Economy at a Glance
With the 4.9 percent August 2021 inflation, the Philippines’ average inflation from January to August 2021 stood at 4.4 percent which is still higher than what is being targeted by the Duterte administration. In August 2020, inflation rate was lower at 2.4 percent.
The uptrend in the country’s inflation was mainly brought about by the higher annual increment in the index of the heavily-weighted food and non-alcoholic beverages at 6.5 percent during the month, from 4.9 percent in July 2021. It was reported that inflation figures for meat products already slowed down, but inflation figures remained high for fish and vegetables (Source PSA).
The ASF Situation
Another town in the Ilocos Province (northernmost part) has been added to the red zone map of African Swine Fever (ASF) after two barangays in Banna town were found to have been infected with the highly contagious viral disease.
The provincial agriculturist confirmed that there are more or less 1000 hogs coming from two barangays that were culled so as to prevent the further spread of the disease.
It was theorized the water from the irrigation canal as well as water from deep wells may have triggered the spread of the virus, or infected meat may have probably entered the municipality amidst stern warning from the local government prohibiting the entry of pig products from other towns and provinces.
There are unconfirmed reports that ASF re-emerged in the provinces of Pangasinan, Tarlac, Pampanga, Bulacan, Laguna, and Quezon after the occurrence of continuous rain last month. Farms are not reporting these observed cases for fear that the local government unit together with the BAI will forcibly cull the animals without the proper compensation. The provinces are all on the main island of Luzon which used to produce the most pigs. It is also the focus of the government’s re-population efforts.
The Department of Agriculture (DA), through its Agricultural Credit Policy Council (ACPC), has allotted an additional P300 million (M) for lending to backyard and semi-commercial raisers in “green zones” or areas free from the African Swine Fever (ASF). The P300 M will help finance swine projects in four ASF-free areas in Regions 4-B (MIMAROPA), 6 (Western Visayas), 7 (Central Visayas), and 9 (Zamboanga Peninsula).
Eligible borrowers include individual, start-up, and existing semi-commercial swine raisers (SCSR), small enterprises, and farmers’ cooperatives and associations (FCAs). Individual borrowers can avail of up to P300,000, start-up SCSR up to P1 M, existing SCSR up to P3 M, and small enterprises and FCAs up to P15 M. The loan has zero interest and is payable for up to five years.
Last year, the DA-ACPC initially allotted P500 M for lending to backyard raisers and micro and small enterprises (MSEs) under its ANYO program. As of August 31, 2021, the ACPC has lent P157.18 M to 1,660 small hog farmers and MSEs.
Agriculture Secretary William Dar said the “OneDA Family” has to date allotted P3 billion (B) to revive the country’s swine industry. It includes the P800-M lending program, P1.2-B fund for the “Bantay ASF sa Barangay” and P872 M for INSPIRE or Integrated National Swine Production Initiatives for Recovery and Expansion program.
The price of the liveweight pig now is 45,000 – 49,000vnd/kg in the North; 48,000 – 53,000 vnd/kg in the center and 47,000 – 51,000 VND/kg in the South. Average will be around 49,000vnd/kg (2.15 USD) with producers suffering heavy losses. Source.
The price of live pig is too low but the price for pork is too high. Pork price today (September 27) at the Retail Food Company recorded no adjustment compared to the end of last week, currently the price remains in the range of 50,000-190,000 VND/kg (2.20-8.35 USD). According to records, pork ribs currently have the highest selling price of 190,000 VND/kg. Source.
According to preliminary statistics of the General Department of Customs, the import turnover of animal feed and raw materials in August 2021 decreased by 17.6% compared to July 2021. However, for the whole 8 months of 2021, it still increased sharply by 30.9% over the same period in 2020, reaching nearly 3.33 billion USD. Source.
Pig production costs remain high, averaging 2.42 USD/kg in second quarter of 2021 with increased water, electric and high prices for raw materials.
Thailand has allocated 4.3 million USD to prevent ASF and other diseases in pigs and wild boar of which 2.88 million USD will be used to compensate farmers for pigs culled between December 2020 and March 2021. The pigs culled were due to the risk of ASF, although tests showed the pigs were negative.
Assam in Northeast India is facing a huge scarcity of Pork due to the continued ASF outbreaks pushing the liveweight pig price up to 2.70 USD/Kg.
Categorised in: Featured News, Global Markets
This post was written by Genesus