Poultry growers and hog raisers see lower feed costs as one possible silver lining in the impending implementation of a free-trade scheme among members of the Association of Southeast Asian Nations (Asean).
Elias Inciong, vice president of the United Broiler Raisers Association (Ubra), said alternative raw materials for feed, such as tapioca, could become cheaper due to the elimination of tariffs under the Asean Free Trade Area-Common Effective Preferential Treatment (Cept).
“With tariffs at zero level, alternative-feed materials such as tapioca would be more affordable,” said Inciong, in a chance interview at the sidelines of a trade and investment mission of the United States Department of Agriculture here in the Philippines.
Albert Lim Jr., National Federation of Hog Farmers Inc. (NFHFI) president, agreed that raw materials for animal feeds will become less prohibitive once the Afta-Cept goes into full implementation next year. Lim noted that tapioca pellets used as feed input are slapped a tariff of 35 percent.
Other feed inputs such as soybeans are slapped a tariff of 1 percent, 3 percent for soybean meal and 3 percent for DDGS (dried distillers grains with solubles).
“Feed materials could become cheaper due to Afta, but the source of the materials could pose a problem,” he said.
The NFHFI chief said only Thailand produces surplus tapioca pellets which the Philippines can buy.
As for yellow corn, Lim noted that Indonesia does not produce enough for export to other Southeast Asian countries at zero tariffs.
Earlier, stakeholders in the livestock and poultry sector admitted that they are keen on Malaysia and Indonesia as possible sources of yellow corn. Under Afta, the 35-percent tariff on yellow corn imposed by Manila will be removed.
Traditionally, the Philippines sources its yellow-corn requirement from the United States, Argentina and Brazil whenever there’s a shortage of the produce. Yellow corn makes up around 50 percent to 60 percent of animal feeds.
Any increases in the cost of yellow corn in the domestic market will have a corresponding impact on the retail price of pork and dressed chicken.