Global supply chain, fish catch woes threaten DA’S ‘galunggong’ import plan

THE high freight costs due to global shipping problems coupled by the lower supply from exporting countries may derail the country’s 60,000-metric ton (MT) small pelagic fish importation, industry players said.

Industry players warned that the approved import volume may not be maximized since prevailing landed cost for small pelagic fish like galunggong is now ranging from P90 per kilogram to P100 per kilogram, higher than the government’s required wholesale price of P88 per kilogram.

“If importers will import this time, the minimum landed cost, at break-even, is already at P100 per kilogram. The fishing season for import sources like China and Vietnam are already finished,” said Francisco Tiu Laurel Jr., president of Frabelle Group during the bi-monthly forum of advocacy group Tugon Kabuhayan.

“The P88 per kilogram wholesale price is too late to be achieved,” Laurel added.

Laurel explained that the P88 per kilogram wholesale price could be hit if the importers bought the stocks in the first half of the year wherein fish prices from countries like Vietnam were at P35 per kilogram price level.

In its 60,000-metric ton (MT) small pelagic fish importation program this year, the Department of Agriculture (DA) required importers to sell the imported fish at a wholesale price of P88 per kilogram or even lower.

Laurel added that the shipping problems, such as high freight costs and lack of vessels and containers, would be an additional challenge for fish importers to be able to meet the DA’S wholesale price condition.

“To be very honest, it is possible [to hit the P88 per kilogram condition] but highly unlikely. It would depend really if they were lucky with the season they bought the fish. But judging with the information right now, prices are high,” he said.

“The freight costs from origin to the destination, say China to Manila, has tripled from P5 per kilogram to P15 per kilogram. And it is also hard to schedule containers right now since the vessels plying our route have been reduced by 60 percent due to Covid19-related problems,” he added.

“I don’t think the 60,000 MT will be fully filled up,” Laurel said.

Laurel also pointed out that he only supports a 30,000-MT small pelagic fish importation for the fourth quarter since the estimated deficit for every month of closed fishing season is only 15,000 MT.

“Since they approved 60,000 MT, the excess 30,000 MT will surely affect the aquaculture sector and our fisherfolk. I think it is really excessive—i hope that the earlier recommendation of our experts and representatives in the NFARMC [National Fisheries and Aquatic Resources Management Council] were followed,” he said.

Rosanna Bernadette Contreras, executive director of Socsksargen Federation of Fishing & Allied Industries Inc. and the aquaculture sector representative in the NFARMC, shared the discussions behind the approved fish importation.

Contreras explained that the Da-bureau of Fisheries and Aquatic Resources (DA-BFAR) presented a supply deficit of about 45,000 MT for the fourth quarter, which the agency rounded off to 50,000 MT. The DA-BFAR also proposed a buffer volume of 15,000 MT of imported fish for the first quarter, making the total import volume at 65,000 MT, Contreras added.

However, Contreras revealed that they only recommended a 30,000-MT import volume for the fourth quarter since the aquaculture sector can easily fill some of the supply gap that the closed fishing season will create.

“As for the first quarter import volume, we said that we should just discuss it later on after evaluating the results of the initial 30,000 MT for the fourth quarter, especially if the volume really materializes,” she said.

“When we saw the press release, we were not happy about the details,” she added.

Contreras said the sectoral representatives in the NFARMC were not happy as well that the basis for computing the country’s fish supply deficit was data from Philippine Statistics Authority (PSA), noting that the government agency’s data set had “waterloos.”

“We are seeing over 100,000 MT of total import volume until the first quarter given the supply deficit that they presented,” she added.

Contreras said one of their concerns with the 60,000-MT volume is that it may force domestic fish catch to be sold in markets that are already self-sufficient, resulting in a supply glut and may send prices to crash.

“The fish that will not be bought in certain markets due to imported fish will end up in local markets in regions that are self-sufficient. And of course, with more supply flooding the market comes lower prices that can be detrimental to local fish producers,” she added.

Last Friday, Agriculture Secretary William D. Dar greenlighted the 60,000-MT importation of small pelagic fishes, such as galunggong, for wet market sale to augment the country’s domestic supply in anticipation of the closed fishing season.

Plugging the shortfall

IN a related development, the National Economic and Development Authority (Neda) has recommended the importation of 200,000 metric tons (MT) of fish to plug any shortfall in production once the fishing season closes.

Neda Undersecretary for Regional Development Mercedita A. Sombilla confirmed to the Businessmirror on Monday that the oversight agency’s recommendation was to import 190,000 MT of fish which was eventually rounded off to 200,000 MT.

“That is based on the SUA [Supply Utilization Accounts] estimates. It’s about 190 tmt [thousand metric tons which] we rounded [off] to 200 tmt,” Sombilla said in a message to the Businessmirror.

Based on the Consumption of Selected Agricultural Commodities in the Philippines, the per capita consumption of galunggong was 5.23 kilograms.

A closer look at the SUA showed that in 2019, the production of round scad ( galunggong), which is the most common species the country imports, only reached 189,003 metric tons.

In 2019, in order to bring up galunggong supply nationwide to above 200,000 MT, the country imported 53,072 MT of the fish species.

The country’s galunggong production fell below 200,000 MT in 2017 when it reached 183,078 MT and again in 2018 when it fell to 171,306 MT.

Between 1990 and 2019, the highest production of galunggong

was recorded in 2007 at 320,215 MT. That was the only year after 2000 when the country did not import the fish commodity.

It can be noted, based on the SUA, that in 2017 and 2018, the country imported 2,752 MT and 5,455 MT of galunggong.

This brought the gross supply of galunggong to 185,829 MT in 2017 and 176,761 MT in 2018, the only years in three decades when the country’s total galunggong supply fell below 200,000 MT.

Three weeks ago, Socioeconomic Planning Secretary Karl Kendrick T. Chua said the government is preparing to issue certificates of necessity to import (CNI) to cover the supply gap with the closing of the fishing season.

By issuing CNIS, Chua said the government can keep inflation at bay. In July, data from the Philippine Statistics Authority (PSA) showed fish prices increased 9.3 percent, higher than the 8.7 percent posted in June.

However, government sources told the Businessmirror that discussions are still ongoing within the DA regarding the issuance of CNIS.

The DA has been allowing the importation of fish in recent years during closed fishing season to augment domestic supply and avert price spikes.