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Philippines reducing pork tariffs

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Country dealing with rising pork prices, tighter supplies due to African swine fever.

To combat rising pork prices and to stabilize supplies, the Philippine government announced April 7 that it will provide more market access for pork imports by lower tariff rates.

National Pork Producers Council (NPPC) applauded the country’s decision as securing better access to the Philippines market has been a top, long-term trade priority for the organization.

“Since 2019, the Philippines has been battling African swine fever (ASF), and as a result, domestic production has declined, supplies have tightened, and pork prices have spiked,” said NPPC President Jen Sorenson, communications director for Iowa Select Farms in West Des Moines, Iowa. “While we are saddened by the spread of ASF in the Philippines, we appreciate the opportunity to send more high-quality U.S. pork to ease the shortage and the spike in prices.”

In a recent National Hog Farmer article, the U.S. Meat Export Federation (USMEF) reported that ASF had dramatically impacted pork production in the Philippines. Data from the Philippine Statistics Authority showed the country’s total swine inventory opened 2021 at 9.72 million head, down 24% from a year ago. Pork production was down by a USDA-estimated 30% in 2020. This drop in domestic output has led to very tight pork supplies and high pork and hog prices, USMEF said.

Under the announcement, beginning April 7, tariffs for imported pork under the increased minimum access volume (MAV) of 404,210 metric tons (MT) would be reduced from 30 percent to five percent for the next three months, and then 10 percent thereafter. Tariffs for imported pork above the MAV would be reduced from 40 percent to 15 percent for the next three months, and then increase to 20 percent thereafter. The reductions would be in effect for one year.

This announcement comes on the heels of NPPC’s meeting with the Philippine Ambassador to the U.S. Jose Manuel Romualdez. NPPC has been pressing both the U.S. and Philippines governments to lower pork import tariffs since ASF outbreaks began in the Philippines.

From January-December 2020, the U.S. exported 49,660 MT of pork worth $121 million to the country. The expanded market access is expected to generate significantly more U.S. pork exports to the country. With a population of 109 million and pork as the preferred protein of choice, pork consumption will continue to increase as the economy grows.

The Asia-Pacific region is the fastest growing economic region of the world with significant opportunities for U.S. pork exports. NPPC will continue to advocate for the United States to rejoin the CPTPP trade agreement.

Win for consumers, U.S. producers

USMEF stated in the recent NHF article that the tariff reduction had drawn mixed reaction from importers. The Philippine Meat Importers and Traders Association (MITA) voiced objections to the short three-month duration for the first round of tariff rate cuts, stating that it would not adequately accommodate orders for imported pork. But MITA also noted that consumers would benefit from price relief made possible by the lower duties on imported pork, even at 10% after the initial round of rate cuts concludes.

Philippine producers, long accustomed to the protection provided by high tariffs, also opposed the rate cuts, claiming that no consumer benefits will be realized and that imports would greatly harm domestic production.

Contrarily, USMEF called the announced tariff rate reductions a “significant win” for the country’s consumers as well as U.S. pork producers.

"High tariff rates have greatly impacted the price and availability of pork in the Philippines, especially with the recent decline in domestic production. The temporary tariff rate reductions announced today will allow retailers, foodservice operators and processors to secure product at more reasonable prices, which will help stabilize pork supplies and bolster consumption," said USMEF President and CEO Dan Halstrom.  

USMEF added that based on weekly U.S. export data (as reported by the USDA Foreign Agricultural Service), shipments of U.S. pork cuts to the Philippines totaled 15,552MT so far this year (through March 25), up from just 2,197MT during the same period in 2020.

“With global pork supplies remaining limited this year, these reductions in import duties will help improve availability in the Philippines and provide further momentum for U.S. exports,” USMEF said.

 

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