MAV suspension could lead to higher pork prices – importers

MANILA, Philippines — Meat importers have warned that pork prices could rise if the government would not immediately resolve the issues surrounding the minimum access volume (MAV) as import arrivals could be delayed.

Meat industry groups told The STAR that the plan of the Department of Agriculture (DA) to suspend the MAV for pork could have “inflationary effects” as it could deter some importers from bringing in supplies from abroad.

Meat Importers and Traders Association (MITA) argued that President Marcos’ Executive Order (EO) 50 allowed for the imports under both in-quota, or within the MAV mechanism, and out-quota (outside the MAV) volume.

The MAV mechanism allows importers to bring in a certain volume of goods at a lower tariff rate.

Under EO 50, pork imports within the MAV are levied with 15 percent tariff while shipments outside it are slapped with 25 percent tariff until end of the year.

“So why should the DA remove the in-quota part?  This is tantamount to revising EO 50,” MITA president emeritus Jesus Cham said.

“EO 50 mandates a semestral review. Why does DA not allow the EO to run its course and review after six months?  This is violating the purpose and objective of the EO,” he said.

Cham pointed out that the country’s meat inflation has been “down” and any interruptions in the country’s meat trade could cause acceleration in prices, particularly for pork.

“If inflation spikes, would the DA not be blamed for exceeding its authority and tinkering with EO 50?” he said, noting that any plans to change MAV rules must not be done unilaterally by the DA.

“Why did DA not get the concurrence of the MAV Management Committee who is the final decision maker on MAV matters?” he added. 

The country’s meat inflation in January further slowed to -0.7 percent from 0.2 percent in December, the lowest rate in seven months, Philippine Statistics Authority data showed.

Cham said MAV quota holders are now “hesitating” on their orders, with most of them on a “wait-and-see” approach. This, Cham claimed, would  result in pork import orders being “delayed” for “several months.”

The Philippine Association of Meat Processors Inc. (PAMPI) echoed MITA’s sentiments that suspending the pork MAV could have an effect on prices of the meat commodity.

“Though our sector will not be severely affected in case MAV is suspended, prices of pork that is brought in for home consumption will increase, and it will have an inflationary effect,” PAMPI said.

Nonetheless, PAMPI noted that it “trusts” the judgement of Agriculture Secretary Francisco Tiu Laurel Jr. on the matter and it believes that the agriculture chief would see the “wisdom” in keeping the pork MAV “for the benefit of consumers without hurting the local hog industry.”

The British Chamber of Commerce Philippines (BCCP) has earlier expressed concerns against the DA’s proposal, emphasizing that it supports the argument that suspending the pork MAV would have an impact on the country’s domestic pork supply and existing trade agreements.

Last week, The STAR broke the story that the DA is looking at curbing the country’s agricultural imports by temporarily suspending the entry of imports of pork and corn within the MAV mechanism. The country’s pork MAV stands at 54,210 metric tons.