Inside Pigs
Philippines boosts US pig futures market
Prices for pigs in the United States have risen even further this week. This means that the pig price continues unabated. The futures market for pigs has higher figures for almost all delivery times. The immediate reason for this is the decision by the Philippines to import more pork at lower rates.
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The Philippines is lowering import tariffs despite threats from pig farmers in the country to stop production. The Philippines is struggling with the consequences of African swine fever (ASF). As a result, the pig herd has been greatly reduced. Due to the decision to increase imports, concerns about recent ASF outbreaks in Asia are increasing worldwide.
Philippines import tariffs reduced
Philippine Prime Minister Duterte decided on Wednesday to increase pork import quotas and reduce import tariffs for the next 12 months, despite protests from pig farmers in the country. The amount of pork that can be imported at a low rate will increase to 400.000 tons. The import rate for this will drop sharply. For the first 3 months, an import tariff of only 5% applies (was 30%). After this, a rate of 9% applies for a period of 10 months. The tariffs for imports outside the quota have also been significantly reduced from 40% to 15% for the first 3 months and 20% thereafter.
The country's pork shortage has caused inflation to skyrocket to more than 4%. That is above the target that the Philippine Central Bank considers responsible. A commodity trader from Archer Financial told Reuters: "What people are actually saying in the Philippines is that they need pork, right now. They can't wait for their own pig herd to recover."
American futures market
Pig prices on the Chicago futures market rose for all delivery dates. For June delivery, the contract is now trading at $1,0790 per pound, which is about $2,39 per kilo. Converted to euros, this is €2,01 per kilo.