Slow imports push up ham and lechon prices at Christmas
MANILA, Philippines — Despite subsiding headline inflation, pork — which has driven the overall price increase faster since late last year — has become more expensive again this Christmas season.
The inflation rate fell to 4.2 percent year-on-year in November, the lowest in four months, the government reported on Tuesday (December 7th).
But the rate of price increase in November in commodity prices remained above the government’s 2-4% target range for manageable price increases. At the end of November, inflation was on average 4.5%.
National statistician Dennis Mapa told a press briefing that lower inflation in food and non-alcoholic beverages – 3.9% in November compared to 5.3% in October – led to the drop in the rate of global inflation.
Nationwide meat inflation also fell to 10.7 percent from 11.9 percent in October.
But in Metro Manila, meat inflation hit 8.8% in November from 7.5% in October. Outside of metro Manila, meat prices rose 11.3% faster on year-over-year, but at a slower pace than the 13.1% rise last October.
Mapa said that after falling in October, pork prices rose again in November. Prices for pure pork, for example, fell to 311 pesos per kilo in October, from 329 pesos per kilo in September, but climbed again to 332 pesos per kilo in November.
In the case of bone-in pork, a kilo cost a higher P303 in November than October’s P282 and September’s P295.
Inflation for pure pork was on average 22%, while that for bone-in meat increased by 23% on average, Mapa said.
Mapa said high demand during the Christmas holidays – when many Filipinos consume pork and dishes like ham and lechon, among others – should keep prices high.
In a statement, the national planning agency National Authority for Economy and Development (Neda) noted that pork prices in November rose 4.2 percent from October levels.
Neda cited data from the Department of Agriculture (DA) which showed slower pork import arrivals. By the end of November, only 42 percent of the minimum expanded pork access volume – the import volume cap – had been used.
The unpublished stock of imported pork, Neda said, stood at 76,953 metric tonnes.
“The slow import and release of stocks, along with higher demand due to the Christmas season, drove average pork prices up in November,” Neda said.
Socio-Economic Planning Secretary Karl Kendrick Chua, also head of Neda, said pork prices continued to decline month-to-month from July to early October.
“This means that our temporary pork import policy has been effective,” he said.
“However, the price hike in November shows that we need to further relax the administrative requirements for unloading and distributing inventory to encourage more imports and help bring pork prices back to their pre-plague level. African swine (ASF), ”Chua said. .
The pork supply shortage due to the local ASF outbreak since late 2020 and other food items made more expensive by bad weather has pushed headline inflation above the target range.
To fight food inflation, President Rodrigo Duterte had issued executive decrees (EAs) to suspend quotas and higher import duties in an attempt to increase the import of pork and fish.
However, Neda said in a separate report that the pork supply will remain in deficit by 155,500 metric tonnes (MT) by the end of 2021.
Neda said delays in import arrivals and the low rate of use of the extended MAV could be due to international port closures and market restrictions imposed by COVID. These, according to Neda, “have prevented the unhindered distribution of imported pork to wet markets and to all regions.”
Neda said the imported pork was only sold in supermarkets, wet markets and Kadiwa centers in Metro Manila and surrounding provinces.
He said that to increase the use of the expanded MAV for pork, the government could consider transferring the unused MAV volumes from the first tranche to the second tranche. Also, the validity of OE No. 133, which lifted most import restrictions, should be extended until December 2022.
“The government could encourage the acceleration and unloading of more stocks of pork from cold stores to markets,” Neda said.
“Quickly releasing pork stocks will help close the supply gap and lower pork prices,” Neda added.
Moreover, despite the planned import of 60,000 MT, the fish supply would still end in 2021 with a shortfall of 126,900 MT, Neda said, citing estimates from the Bureau of Fisheries and Aquatic Resources (BFAR) to the end of October.
Citing data from the Philippine Fisheries Development Authority, Neda said 57,121 tonnes of import volume had been allocated to 26 importers. At least 22.7 percent of import permit applications had already been issued sanitary and other permits, Neda said.
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