Press Release
August 21, 2007

ROXAS URGES DA, DTI TO TAKE STEPS ON CHICKEN SUPPLY, PRICES
IF SITUATION NOT ADDRESSED, COULD LEAD TO DECEMBER SHORTAGE

Senator Mar Roxas urged the Departments of Agriculture to take the necessary steps to address the tight chicken supply situation being experienced at present.

"We are concerned about the security of supply and the stability of the marketplace. We want to make sure that peaks and drops in supply and prices are not extreme. Ang long-term effect nito ay pagdating ng Pasko, talagang kukulangin tayo ng manok," he said.

He also asked the Department of Trade and Industry to strengthen its monitoring of prices in wet markets and other retail outlets, on news that prevailing prices of chicken have increased to P120 per kilo, or as much as 20% higher than last year. This, despite farmgate prices being at lowest levels of around P70 per kilogram.

During a consultation today with DA, DTI and representatives from the poultry and hog industries, Roxas said that there is a consensus so far that around 3 million kilograms of additional chicken supply will be needed to address the tightness of supply in the third quarter.

This scenario, he said, started when there was excess importation of chicken in December last year, which spilled-over to the first few months of this year. Because of this, coupled with low demand for chicken in the first half, Roxas said the poultry industry did not load their chicken grow-out capacity, leading to a tight supply scenario in recent months.

What complicates the issue, however, is that the DA and the industry have not yet agreed to the "special" importation of 3 million kilograms of chicken. He noted that poultry industry representatives attending the meeting—the United Broiler Raisers' Association of the Philippines (UBRA) and the Philippine Association of Broiler Integrators—expressed reservation to the plan.

This, as there is roughly 13 million kilograms of unutilized Minimum Access Volume quotas, and this could be utilized anytime by importers who may be waiting for a good price due to a supply shortage. MAV is a mechanism where firms are allowed to import chicken up to a certain limit. Total MAV for this year is 23 million kilograms, yet only P10 million, around 45%, of this importation authority has been utilized.

"Kung nagpatong-patong ang lahat ng ito, maaari na magkaroon ng malawakang pagkukulang sa supply ng manok," he added.

Roxas proposed to DA that rules on MAV utilization be amended in order to provide more predictability in the importation of chicken. Instead of the requirement that 70% of the allowed MAV must actually be imported within the year, he said this performance requirement may be spread out per quarter.

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