Port Congestion Deters Meat Importers' Orders, Raising Economic Concerns

By Justine Irish D. Tabile, Senior Reporter MEAT IMPORTERS are reducing their orders due to persistent congestion at Manila ports, which they say adds at least P50,000 per container to their costs and ties up trucks for two to three additional days, an industry official said. Meat Importers and Traders Association President Emeritus Jesus C. Cham said congestion at Manila’s ports emerged during the October-November peak season last year, conditions which have continued. “The port has been congested since last year,” he told reporters on Monday. “Every year (there is congestion), but (only) during peak season. Now, it is continuous — the whole year now,” he added. “Per container, you would be talking maybe at least P50,000 in additional costs,” he said. “Let’s say about P2 to P5 additional cost per kilo.” He said the percentage increase is larger for lower-value products such as mechanically deboned meat, while the impact is smaller for higher-value meat products. Prolonged congestion has prompted some importers to reconsider or reduce their purchases. “My company (is) reluctant to place a lot of orders. I don’t know about the other guys,” Mr. Cham said. “Many importers are cutting back, and many small importers probably will not be placing new orders because the market is very depressed.” Mr. Cham said meat importers are also feeling the squeeze from the weak peso, higher oil prices, increased wages and rising transport, logistics and utility costs. He added that importers may find it difficult to pass on the higher costs to consumers because wholesale prices remain depressed due to weak demand. “Many importers are losing money,” he added. He said retail prices have remained firm, while restaurants and other food-service companies using imported meat may be benefiting from lower wholesale prices. The Bureau of Animal Industry reported meat imports of 872.27 million kilograms in the first half, up 12.1%. Mr. Cham said at the current pace, meat imports could still hit records this year, although the outlook remains uncertain due to the reduction in orders. However, he said the combination of weak demand, higher landed costs and port delays may discourage importers from purchasing at the same pace during the second half. The Bureau of Customs and other government agencies are preparing a joint administrative order aimed at easing port congestion and regulating cargo-handling charges, with signing targeted for August.