U.S. pork exports to the Philippines rose sharply this year following the country’s decision to temporarily increase its import quota and reduce tariffs, and the National Pork Producers Council believes the improved trade conditions may extend through 2022.
In need of more imported pork while the country battled African swine fever, the Philippines raised its minimum access volume — essentially a tariff rate quota — for pork and lowered in-quota tariffs in May. The expanded quota of 254,000 metric tons and reduced tariff rate of 15% are scheduled to revert to just 54,000 tons and 30%, respectively, on Jan. 31, but NPPC says the Philippine government is showing signs that might not happen.
Instead, NPPC is hearing rumblings that the Philippines may extend the quota expansion and tariff reduction through all of 2022.
The stakes are high for the U.S. pork industry, which is highly dependent on exports.
U.S. pork sales to the Philippines increased rapidly this year in the span of several months, more than doubling from last year, according to a data maintained by NPPC. The U.S. exported $194 million worth of pork to the Philippines in the first 10 months of 2021, a 107% increase from the same time period in 2020.
“Securing better market access to the Philippines, a major pork-consuming country, has been a top, long-term trade priority for NPPC, which continues to work with the government in Manila and with the Office of the U.S. Trade Representative and U.S. Department of Agriculture to make the tariff reductions permanent,” the group said.
Meanwhile in China, Beijing is preparing to increase its base tariff on frozen pork. China had cut the WTO-sanctioned “most favored nation” tariff from 12% to 8% as it continued to rebuild its swine herd, but that is scheduled to revert to the higher level on Jan. 1, says NPPC.
China also continues to levy a separate 25% tariff on U.S. pork in retaliation for U.S. tariffs on Chinese steel and aluminum, something NPPC says it continues to oppose.
Overall U.S. pork exports to China and Hong Kong in the first 10 months of 2021 dropped 24% from the same time period in 2020, according to the U.S. Meat Export Federation data.
But even though China's overall demand for pork imports is decreasing, the country remains a significant importer, USMEF says.
“Although China’s demand for pork muscle cuts has softened significantly, it remains a critical, value-adding destination for U.S. pork variety meat,” according to a recent USMEF analysis. “Through October, pork variety meat exports to the China/Hong Kong region were 22% above last year’s large totals at 284,568 (tons) and climbed 27% in value to $685.9 million.”
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