Genesus Global Market Report
Philippines
The Swine Market
The Philippines has elected its new set of leaders to run the country. The newly elected president is Ferdinand “Bongbong” Romualdez Marcos, the son of another former president. Usually, as an aftermath of each and every election, the buying power of the people is lessened and goes back to its real picture.
Prices of pork have started to go down after the national elections. It coincided with the cyclical trend that usually happens during the 3rd quarter of each year. As of end-May, the average live weight price was 194 PhP per kg, lower by 4 PhP during the previous month but is still higher than the average recorded price in May 2021 which was 181 PhP per kg.
The cost of production continues to squeeze farmer profitability. Feed, feed raw material, and fuel continues to contribute to the increase in production cost, not to mention the mandate of the government to increase the salaries of workers. Other production inputs like electricity costs and imported animal health products are also on the rise. The Philippine Peso is devaluating at a fast rate vs the US Dollar. Pressure coming from the influx of imported frozen pork added to the fast and sharp decline of locally produced pork. In 2021, prices started to soften up on June 7, 2021 (ProPork price monitoring), but for 2022 they started to go down on May 01.
In an article published by the Philippine Star last June 24 titled “Meat imports up 5% in 5 months”, it stated that there was a registered increase of 4.8% in meat product imports in the first 5 months of 2022, mainly driven by pork (BAI data). Data from the BAI showed that the Philippines imported 460.9 mio kgs of meat and other meat products from January to May, higher than the 439.9 mio kgs imported same time as the previous year.
The outgoing has signed Executive Order 171 which extends the lower tariffs on pork under EO 134, which was signed in 2021. The new EO 171 aims to further bring down prices and stabilize the pork supply in the country. Under this new EO, the 15% in-quota and 25% out-quota tariff rates for pork will be extended to December 31, 2022.
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Philippines As the rainy season starts, the emergence of farm diseases and viruses also start to spread all-over the country. ASF-like symptoms appear again in different parts of the country. Rumors have started that some farms in General Santos City and Bukidnon have been infected by African Swine Fever (ASF). As a result, many farms in Visayas and Mindanao are now depopulating, and commercial slaughter pigs are continuously being sent to the mainland Luzon. There are also on-going reports that some of the key-areas of swine production in Luzon are now experiencing ASF-like symptoms on their farms. Due to these unfortunate events, the live weight price is continuing to fall.  The Philippine Economy As of August 9, 2022, the Philippine economy grew at a slower pace in the second quarter of the year (Philippine Statistics Authority). The country’s GDP grew by 7.4% from April to June, slower than the downwardly adjusted 8.2% GDD growth in the first quarter of the year. “The global headwinds, particularly inflation, those coming from fuel and food contributed to that somewhat slowdown,” Socioeconomic Planning Secretary Arsenio Balisacan said at a press conference. Inflation has been growing faster in April (4.9%), May (5.4%), and June (6.4%) as global oil supply disruptions brought by the Ukraine-Russia war and domestic supply challenges kept fuel and food prices elevated. National Statistician and PSA chief Claire Dennis Mapa said the main contributors to the second quarter growth are services sector with 5.5 percentage points contribution followed by industry with 1.9 percentage points share. Agriculture, forestry, and fishing contributed 0.02 percentage points to the 7.4% second quarter GDP growth. In particular, agriculture, forestry, and fishing; industry; and services all posted positive growths during the period at 0.2%, 6.3%, and 9.1%, respectively. The PSA also reported that the country’s underemployment rate – the proportion of those already employed but still wanting more work – went down to 12.6% in June from 14.5% in May. This translates to a decrease of 780,000 people looking for more hours of work from the 6.67 million in May to 5.89 million in June. Full-time employment, or those who worked for more than 40 hours a week, increased by 11% or an additional 3 million individuals, while part-time workers declined by 8% or 1.4 million fewer individuals compared to June 2021. The mean hours of work improved from 39 hours in June 2021 to 40.3 in June 2022. The visible underemployment rate or the proportion of underemployed people working less than 40 hours in a week went down to 8.5% in June from 9.8% in May. “The latest data show a significant increase in the number of workers employed on a full-time basis. While this is a good indication of the improving quality of work in our country, the government should incessantly boost its efforts towards providing an environment conducive to the creation of more and better employment opportunities,” said Socioeconomic Planning Secretary Arsenio Balisacan. Meanwhile, the unemployment rate remained unchanged at 6% in June. This translates to 2.99 million jobless Filipinos. Over 1.5 million more Filipinos joined the labor force in June 2022 compared to the same month in 2021, bringing total employment to 46.6 million. Genesus Philippines will be exhibiting at Livestock Philippines Booth number F16, between 24-26th August 2022, we look forward to meeting you.  Thailand Pig production cost jumps in Thailand Rising costs of feeds and breeding stock, coupled with increasing losses from disease outbreaks are making pig production cost in Thailand jumping. The national board for pig industry development reported that pig production cost in Thailand jumped 30% year-on-year to THB 100/kg (USD 2.7) in August. Meanwhile, average production loss or mortality of commercial pigs was as high as 20% in the month and is expected to be at this level throughout the year. The heavy loss is due mainly to ASF, which is spreading across the country for more than two years. The government called for pig producers to sell live pigs at THB 100/kg. But in fact, the selling price is higher to THB 112-114/kg (USD 3.1- 3.16) depending on the region. Replacement gilts in Thailand are sold according to the price of commercial pig price plus additional THB 4500-6000 (USD 125-166) for genetics premium. Based on this formula, a gilt is being sold at THB 15,900 – 17,400 (USD 441-483) . It is estimated that over half of Thailand’s one million sows has been culled or killed due to ASF outbreaks. At the same time, finished feed prices keep increasing following volatility of raw material prices in the world market. It is estimated that the feed cost has increased by 40% year-on-year. Vietnam The price of the pig now is 65,000 – 67,000 vnd/kg in the North; 58,000 – 68,000 vnd/kg in the center; and 60,000 – 70,000 vnd/kg in the South. Average will be around 65,000vnd (2.8USD/kg. More detail, please see the link: https://vietnambiz.vn/gia-heo-hoi-hom-nay-158-gia-thu-mua-tang-nhe-o-mien-nam-20228151247988.htm. BAF Vietnam Agriculture Joint Stock Company (HoSE: BAF) has just announced the resolution of the Board of Directors approving the plan to receive capital transfer to another unit. Accordingly, BAF is about to receive 99.9% shares of Tan Chau Agricultural Investment Co., Ltd. (source: https://nhachannuoi.vn/baf-mua-lai-cong-ty-chan-nuoi-lon-o-tay-ninh/). Vietnam Livestock Magazine] – According to the Department of Livestock Production, the output of industrial feed in the first six months of 2022 is estimated at 10.5 million tons, equivalent to the first six months of 2021; in which feed for pigs (accounting for 55% of total production) increased by about 13.2%, for poultry (accounting for 40%) decreased by about 8.6%, other foods (accounting for 5%) decreased by about 12.5% (source: https://nhachannuoi.vn/6-thang-dau-nam-2022-san-luong-tacn-cong-nghiep-dat-105-trieu-tan-2/). The 3 meat cutting trends manufacturers need to know in 2022: + Trend 1: Sliced meat is becoming the preferred choice of consumers. + Trend 2: Improve output and revenue: Optimize input materials. + Trend 3: Automation – Save labor (Source: https://nhachannuoi.vn/3-xu-huong-cat-thit-nha-san-xuat-can-phai-biet-nam-2022/). African Swine Fever: If you done good Biosecurity, the more lower of risk the disease (Source: https://nhachannuoi.vn/benh-dich-ta-heo-chau-phi-lam-tot-an-toan-sinh-hoc-den-dau-rui-ro-benh-cang-thap-toi-do/). Livestock production along the value chain towards sustainable livelihood development (source: http://cucchannuoi.gov.vn/chan-nuoi-theo-chuoi-gia-tri-huong-den-phat-trien-sinh-ke-ben-vung/). Animal welfare is one of the important criteria for the development and integration of the livestock industry in Vietnam, thereby enhancing product value in the future (source: http://cucchannuoi.gov.vn/phuc-loi-dong-vat-la-tieu-chi-quan-trong-voi-chan-nuoi-viet-nam/). |
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The ASF Situation and Repopulation Efforts
Filipino pork, poultry, and feed producers gathered in a face-to-face International Farmers Summit in the early part of June. Despite all of the challenges faced by the local industry, the majority of pork producers are optimistic about the future. Given the current supply situation, technified commercial farms are still in their expansion and repopulation modes. Smaller farms on the other hand wanted to continue producing but are worried because of the ASF situation. Both segments are hopeful that the ongoing ASF vaccine trials and the ASF vaccine from Vietnam gets Philippine approval secondly, the smaller farms would like to have easier access to the government’s grant under the project INSPIRE (Integrated National Swine Production Initiatives for Recovery and Expansion).
The Philippine Economy
According to the Philippine Statistics Authority, inflation, as measured using the consumer price index, accelerated 5.4% in May. This was higher than the reported figure in April which stood at 4.9%.
Higher expected inflation is primarily due to elevated prices of global non-oil commodities such as food and agricultural products and metals, a continued shortage of domestic pork supply, higher fish and poultry prices, and probable transport price increases due to higher oil prices are the upside risks. Meanwhile, slower global economic recovery, as well as possible re-imposition of quarantine measures due to domestic COVID cases resurgence, may weaken demand and slow down inflation, this might be the downside risk according to a a Banko Sentral report.
Thailand
Recovery of the pig industry in Thailand questioned
Thailand’s Ministry of Agriculture said the number of sows in Thailand had been recovered to nearly one million heads, ensuring the country would have sufficient pork for consumption.
The ministry estimated that 20-30% of sows were destroyed from ASF outbreaks over the past year. The recovery of the sow population boosted commercial pigs to about nine million heads based on a monthly survey conducted by the ministry from January to June 2022.
“With this commercial pig population, it is sufficient to meet the domestic consumption of about 1.5 million heads/month,” the ministry said in a statement.
Some pig producers, however, are curious whether the ministry’s statement is accurate. They said if the recovery of the sow and commercial pig were true, it would only be major producers that could expand their herds.
Medium and small-scale producers who were hit by ASF would hardly be resuming their operations in the time that construction materials, energy, and feed raw material costs keep on rising since the war between Ukraine and Russia took place in late March.
Due to these impacts, buying power of consumers in Thailand is much lower than last year. Nevertheless, the price of live pigs at present is increased by 37.5% year-on-year to THB 110/kg (USD 3.2). And this price has been stable for eight consecutive weeks.
This signals that sows and commercial pigs in Thailand remain in short supply.
Vietnam
- The price of the pig now is 56,000 – 61,000 vnd/kg in the North; 51,000 – 57,000 vnd/kg in the center; and 55,000 – 59,000 vnd/kg in the South. Average will be around 56,000vnd/kg. More detail, please see the link: https://vietnambiz.vn/gia-heo-hoi-hom-nay-276-tang-1000-dongkg-rai-rac-mot-vai-noi-2022626202158751.htm.
- The price of breeders and animal feed has continuously increased while the selling price of products has increased slowly and below the cost level, causing many fish and pig farming households in Tien Giang to stop raising (source: http://nhachannuoi.vn/chi-phi-tang-cao-nguoi-chan-nuoi-o-tien-giang-dieu-dung/).
- After more than a year of research, even sleeping in the barn to monitor the pig herd’s activities, a group of alumni of Hanoi University of Science and Technology has successfully built a climate control system in the barn (source: http://nhachannuoi.vn/cuu-sinh-vien-bach-khoa-ngu-trong-chuong-heo-de-nghien-cuu/).
- [Vietnam Livestock Magazine] – Informa Markets and the Department of Livestock Production (MARD) have strengthened their partnership and cooperation, by signing a Memorandum of Understanding for a common goal, to promote the livestock industry. raise Vietnam to develop sustainably. Accordingly, the Department of Livestock Production will be the host and market consultant for VIETSTOCK 2022 and pre-exhibition activities (source: http://nhachannuoi.vn/informa-markets-cuc-chan-nuoi-ki-bien-ban-ghi-nho-ve-quan-he-doi-tac-chien-luoc-dai-han/).
- The price of animal feed increased sharply: Solving difficulties by finding alternative materials (source: http://cucchannuoi.gov.vn/gia-thuc-an-chan-nuoi-tang-manh-go-kho-bang-tim-nguyen-lieu-thay-the/).
- Vietnam successfully produces vaccine against African swine fever (source: https://www.vietnamplus.vn/viet-nam-san-xuat-thanh-cong-vaccine-phong-benh-ta-lon-chau-phi/793490.vnp).
