WorldWatch:

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 CPF eyes larger exports despite economic crisis 
[8 April 2009] Charoen Pokphand Foods Plc (CPF) expects its exports to grow this year despite the global economic crisis but total sales will remain flat as domestic consumption is forecast to fall. Food exports would make up 18% of the company's sales revenue this year, an increase from 16% last year, with revenue from its foreign operations in 10 countries growing to 17-18%, up from 16% last year. Domestic sales, meanwhile, are expected to drop to 64% of total sales, from 68% in 2008, because of the poor economic outlook and lower consumption. CPF has set a conservative sales revenue target for this year at a flat from 2008 at THB 156.23 billion (USD 4.42 billion).
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CPF evaluates investment in the Philippines
[8 April 2009] Charoen Pokphand Foods Plc (CPF) is looking at investment potential in the Philippines after being invited by President Gloria Arroyo to invest in an integrated farming business there. A team of experts will be sent to study the feasibility of the project, which would be a fish and shrimp feed manufacturing plant, if the investment and political climate is favorable. 
 
 
 

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10 April 2009] The Philippine Bureau of Customs (BOC) confiscated eight 40-foot container vans containing poultry, beef and onions smuggled into the country. The shipments came from three countries and were valued at PHP 32.6 million (USD 679,182). Two of the containers had 29 tonnes of frozen chicken worth PHP 5.88 million (USD 122,399) from the U.S. and another two containers had 50 tonnes of frozen boneless beef worth PHP 19.63 million (USD 408,793) from Australia.

[mikey]

Ag Sector More Resilient to Global Crisis Than Others
GLOBAL - Because food is a basic necessity, the agriculture sector is showing more resilience to the global economic crisis than other industries. But the risks could increase if the economic downturn deepens, according to a new report by the OECD and FAO released yesterday.


Food prices are still high in many poor countries.Falls in agricultural prices and in the production and consumption of farm goods are likely to be moderate as long as the economic recovery begins within two to three years, says the OECD-FAO Agricultural Outlook 2009-2018. As the downturn lowers food prices, pressure is eased on recession-hit consumers who have less money to spend, it says.

Food prices have come down from the record peaks of early 2008 but they remain high in many poor countries. Over the coming decade prices for all farm commodities except beef and pigmeat - even when adjusted for inflation - are unlikely to fall back to their average levels before the 2007-08 peaks.

Average crop prices are projected to be 10-20 per cent higher in real terms (adjusted for inflation) for the next 10 years compared with the average for the period 1997-2006. Prices for vegetable oils are expected to be more than 30 per cent higher.

An expected economic recovery, renewed food demand growth from developing countries and the emerging biofuel markets are the key drivers underpinning agricultural commodity prices and markets over the medium term.

The report warns that episodes of extreme price volatility similar to the hike in 2008 cannot be ruled out in coming years, particularly as commodity prices have become increasingly linked to oil and energy costs and environmental experts warn of more erratic weather conditions.

Although agricultural production, consumption and trade are expected to increase in developing countries, food insecurity and hunger is a growing problem for the world's poor.

The report argues that the longer term problem is access to food rather than food availability, with poverty reduction and economic growth a big part of the solution. Agriculture growth is key for sustainable development and poverty reduction since 75 per cent of the poor in developing countries live in rural areas.

The report says that, in addition to more effective international aid, governments can best support domestic agricultural development through targeted policies such as infrastructure investment, establishing effective research and development systems and providing incentives for sustainable use of soil and water.

It also emphasises the need for greater opening of agricultural markets and broadening economic development beyond farming in poor rural regions.

[mikey]

Actions have consequences; for individuals and for nations. Sometimes, the consequences are so severe that the person is changed forever. The same can happen with the world.

I am astounded that virtually all of our political leaders, even the smart ones, have not woken up to the fact that it will never be economically “business as usual” again. It scares me and it should scare you, too.

I receive e-mail constantly telling me that I am overly concerned or simply crazy in my belief that we are entering a new, uncharted world. Just wait, they say, and the crisis will be over; it is just a normal bump on the road. The “smarter” ones even point to the 1997 Asian crisis as an example. Oh, you think so, do you?

My Fil-Am mother-in-law and her husband will retire next year. They intend to sell their big house in Los Angeles and use the money to move to a rural, cheaper area of the USA. They will use the money from the house sale also to open a small business to supplement their income. She says they will now wait a couple of years for the economy to recover so their plans can progress. Just a bump on the economic road, she tells me. Not a chance. It is a new world out there, and this is why.

The 1997 Asian crisis was a forerunner to 2009. South Korea fell in 1997 doing exactly the same thing as is being done in the USA now; bailing out, public funding of bankrupt companies. As a result, Sokor’s budget deficit skyrocketed, forcing it to borrow unprecedented amounts from the International Monetary Fund. Their economy died as money was diverted from useful purposes to paying the debt caused by diverting public and private funds to bailouts. The Korean won fell from 867 to 1,695 to the dollar in one year, 1997-1998.

Thailand went on a massive borrowing frenzy in the early 1990s, borrowing dollars from foreign sources to fund its economic expansion. Remember Thailand’s “Tiger economy”? Eventually those loans had to be repaid. But all that dollar borrowing did not create dollar revenues. So the borrowers had to sell Thai baht to buy dollars to repay the loans, thus causing the baht to move from 26 to the dollar on January 1, 1997, to 52 to a dollar in January 1998.

Back to normal? The baht now trades at 34 and the won at 1,247. Further, note this important fact: The 1997 price of crude oil was $20; in 2009 the price is $71. In January 1998, the US dollar index was over 100; now it is at 80.

The exact same scenario is playing out in the USA with the current budget deficit rising from $162 billion in 2007 to $1.7 trillion in 2009. US government debt: from 54 percent of gross domestic product (GDP) then to over 100 percent of GDP now.

As we learned from the 1997 Asian crisis, it takes a long time for things to return to “normal” and they never go back they way they were, when the consequences of policy and action are severe enough as they are now.

The Obama stimulus plan is a total failure. All the budget deficit and all the government debt has not revived the economy even a little. In fact, the unemployment, consumer-spending and economic-activity numbers are growing more negative. But all that debt has to be paid back. Further, the stimulus money combined with a falling dollar is raising prices, inflation, in the USA.

The USA must either 1) raise taxes, which will hurt economic activity even more, or 2) “monetize” the debt by printing new dollars to pay the debt, which will cause dollar devaluation. There are no other choices available. Next comes inflation fueled by excess cash in the system and a devalued dollar, which will be met with a rise in interest rates, reducing economic growth even more.

It is a global meltdown even now. Japan’s manufacturing capacity is running at 50 percent and falling, and GDP is falling at a negative-15-percent annual rate. The world air-travel industry is forecast to lose $9 billion in 2009, revised from a $4.7-billion loss just two months ago. India’s credit growth is shrinking and credit is vitally necessary for their economic growth. China’s consumer spending, despite government pump-priming, is stalling, reducing the hope that their domestic market could offset problems in the export sector. International ocean cargo shipping is operating at below break-even.

The world’s investing cash will flee from the West to countries like the Philippines just as the opposite occurred in 1997. We will read more headlines like this; “‘Hot’ money inflows surged in May,” “Remittances hit record high in March” and “Philippine call centers ring up business.” And this headline yesterday tells the truth about the Philippine economy: “GMA 7 profit up by 22 percent in January-May.” Recession? Sure. Right. Whatever you say.

Why should you be afraid of the “experts” and ignorant leaders? Because any policy based on believing that there has not been a fundamental change in the world economy, a belief that things will soon return to “normal,” will be disastrous for this nation.

And I told my mother-in-law to sell the house now because any future increase in the price will be more than offset by dollar devaluation and a $100 oil price. Then come back to the Philippines, which is one of the few places left where wealth creation will be possible in the next five years.



PSE stock-market information and technical-analysis 

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Meat Quality Prediction in Scotland
SCOTLAND, UK - Plans for a project that will see Scotland leading the rest of the world in predicting the eating quality of cuts of meat were announced today.



Meat processors in Scotland will be offered technology that for the first time will allow them to accurately measure the different factors, such as tenderness, colour and fat levels, that add up to overall quality, says the Scottish Government.

The project, run by Quality Meat Scotland, the Scottish red meat industry development body, and part-funded by the Scottish Government, will initially focus on beef but the aim is to extend it to lamb and pork.

At the Royal Highland Show today Rural Affairs Secretary Richard Lochhead said: "This unique project is good news for the red meat sector and even better news for consumers. We know the importance shoppers attach to quality and taste and that this, in turn, provides a boost for those responsible for Scotland's world-class produce.

"It is fitting that this research project is being launched at the Royal Highland Show, one of the best showcases for rural Scotland and our food and drink. It also comes on the eve of our announcement of the next steps in Scotland's first-ever National Food and Drink Policy, which will deliver further benefits throughout the food chain, from gate to plate."

QMS Chairman Donald Biggar said: "This is an extremely exciting initiative which puts Scotland at the very forefront of what is a global quest to offer guarantees to consumers about the eating quality of the beef they're buying.

"Our Scottish meat processors will be the first to have the technology to make a rapid assessment of the complex range of factors that together determine how well a piece of beef tastes. The data on the quality of individual carcases in meat plants can be fed back from the processor to the producer so that he or she can pinpoint the sort of farm level decisions that are delivering consistently high quality meat.

"Capturing this level of information and using it as a mechanism to further drive up the quality of beef produced across Scotland has the potential to revolutionise how we promote our Scotch Beef to consumers around the world."

Scotland's meat plants process around 8,500 prime beef carcases every week producing 2900 tonnes of meat each week. The turnover of the beef processing industry in Scotland is worth half a billion pounds annually.

Around 70 per cent of all Scotch Beef produced in Scotland is sold in England. The European export market, which suffered a setback following the 2007 Foot and Mouth outbreak, is now back on track with increasing volumes being delivered to key markets in France, Italy, Belgium and the Netherlands.

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25 June 2009] Despite the current economic crisis, meat consumption in Asia is projected to grow in the long term due to continued economic development and the large population base in the region. According to Oscar Tjakra, Assistant Manager at Rabobank International’s Food & Agribusiness Research and Advisory per capita meat consumption in Asia is projected to grow by 8-42% from 2006-2016 with pork being the main meat consumed in the region.Beef consumption in China is growing at a faster rate than poultry meat and pork and urban residents are switching to higher value meats such as imported grain-fed and marbled beef.

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[25 June 2009] A group of Philippine livestock and poultry farmers and feed millers are seeking the restoration of zero tariff on feed wheat for at least another six months to prevent increases in pork and poultry product prices. The Alyansa Agrikultura (Agricultural Alliance) said in statement that the Cabinet Tariff Reform Matters Committee's  decision to recommend the scrapping of the duty-free feed wheat importation is unfortunate, as this will could push up corn prices, which in turn would push up prices of pork, poultry, and other meat products and perhaps even fish products.

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[2 July 2009] Philippine agricultural production is expected to post a slower growth in the second quarter of this year compared to the same period last year. Agriculture Secretary Arthur Yap is predicting a 1.5-2% growth for April-June this year, which would be down from the first quarter’s 2.02% growth and the 5.4% growth recorded in the 2nd quarter of 2008. Mr Yap did not specify the reason for the slowdown, however analysts have pointed to various possibilities, from weather and climate change to high costs to the economic downturn.

[mikey]

RSPCA Speaks Out Against Live Export Trade
AUSTRALIA - The Live Export Shipboard Performance Report revealed that more than 36,000 sheep, cattle and goats died while being transported overseas for slaughter in 2008.



"It's not a quick or simple death - they died from such things as starvation, salmonellosis, injury and pneumonia," said The Royal Society for the Prevention of Cruelty to Animals (RSPCA) Australia.

"The sad reality is that Australia's live exporters measure their success by the number of animals still standing at the end of the sea voyage. The fact is that tens of thousands of animals that embark on these journeys out of Australia every year will not walk off at the other end."

The RSPCA warns consumers not to believe the live export lobby's claims that this is an entrenched Australian tradition. "It isn't," they say. "Live exports represent just another market opportunity."

"But it is a market opportunity that comes at a cost to animal welfare and to Australia's reputation. There are alternatives that have proven to be far more lucrative than the trade in live animals. Our meat exports are seven times more valuable to the economy and they keep jobs here in Australia."


 

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4 August 2009] Western Visayas topped 15 regions in the country outside the National Capital Region in the January 2009 livestock inventory, figures from the National Statistics Coordination Board (NSCB) show. The region,which include the provinces of Iloilo, Negros Occidental, Aklan, Antique, Guimaras, and Capiz  reported a total of 2.6 million heads of livestock. This accounts for 11.2% of the total livestock produced in the country. Of the total livestock produced in Western Visayas, hogs account for 57.4%, goat (17.7%),  carabao (14%) and cattle (10.8%). The region ranked first in goat production, with 606,039 heads; third in hog production with 1.5 million heads and carabao production with 325,532 heads and fifth in cattle production (212,634 heads).

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6 August 2009] Chinese authorities have de-listed three US pork and two US poultry plants because of 'multiple detections' of 'chemical drug residues and epidemic pathogens' said the USDA's Food Safety and Inspection Service. Smithfield Packing Co., Tar Heel, N.C;John Morrell & Co., Sioux City, Iowa;Seaboard Foods, Guymon, Okla.;Equity Group-Ky. Division, Albany, Ky. and Mountaire Farms-Delmarva, Selbyville, Del. have been banned from exporting products to China.

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Negros feared to lose billion-peso industry in GMO ban

ONE of the country’s largest suppliers of feeds may pull out its contract-growing operations in Negros Occidental if the Provincial Government decides to continue with the implementation of Ordinance 007, which bans entry of genetically-modified products into the province.

Joey Avila, Visayas area manager of B-MEG, a subsidiary of San Miguel Group of Companies, Friday said the company will have no choice but to suspend the contract growing and possibly transfer it to other provinces.

The company supplies 30,000 sacks of mixed feeds to contract growers of Magnolia and 100,000 sacks contracted by other poultry companies every month, he said. For Magnolia contract growers alone, B-MEG generates monthly sales of P50-70 million, Avila said.

The province is the second net exporter of poultry products in the country next to Bulacan.

The Negros Hograisers Association (NHA), Negros Occidental Poultry Raisers Association and the Association of Backyard Raisers in Negros Occidental have called on the Provincial Government to declare a moratorium on the ordinance’s implementation pending the review and possible amendments to the 2007 law.

They claimed that they incurred P.9-million in additional costs for animal feeds after the ban was enforced in April. Hogs and poultry raisers were forced to source their feed requirements from Panay which translated to an additional P2 per kilo of feeds. They consume 15 tons or 15,000 kilos of feeds daily.

NHA president Albert Lim also stressed that the indecision by the Provincial Government has caused the suspension of investments in the province, particularly in the establishment of feed mills which will not only provide livelihood opportunities but employment as well.

Meanwhile, a Department of Agriculture (DA) official claimed the implementation of the anti-GMO ordinance “will kill the strength” of the livestock and poultry industry in Negros Occidental.

DA director for Biotech Program Office Alicia Ilaga told provincial officials Friday to “weigh the consequences if they decide to fully implement the ordinance.”

Ilaga was one of the nine speakers in the five-day en banc committee hearing on the anti-GMO ordinance that culminated yesterday at the Provincial Board (PB) session hall.

She noted: “If we ban all GM products like feeds, vaccines, cotton and other products, are there organic counterparts readily available that can suffice the need of the livestock and poultry sector?”

The PB will deliberate on the pros and cons that were raised by the invited resource speakers to decide on whether or not the ordinance will be amended.

Dr. Saturnina Halos, another resource speaker, told the PB that “transition to organic is very hard and more expensive.”

Further, resource speaker Dr. Santiago Obien also said the Provincial Government will need a P3-billion budget to effectively implement the ordinance.

Halos, chairperson of the DA Biotech Advisory Team, also informed the PB that there is “no single detection kit for GM crops” thus, the use of “your kit right now could be a venue for corruption.”

Meanwhile, University of the Philippines College of Public Health dean Dr. Nina Gloriani said there are different views on the use of aspartame, a biotech product, and “anything used in over-dosage can kill.”

“GM and non-GM products can co-exist,” a fact that will be highlighted in the 4th International Conference on Biotechnology in Australia in November this year, she said.

Published in the Sun.Star Bacolod newspaper on 1, 2009.

Written By George M. De La Cruz

Source: Sun Star

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Next crises: Food and water

REGARDED as the country’s “Prophet of Boom,” Dr. Bernardo Villegas of the University of Asia and the Pacific (UA&P) on Thursday sounded a surprisingly ominous tone. He warned that the next crises the country will face in the next few years would be on food and water.

In a presentation at the Mapfre Insular and Insular Life CEO Forum and Economic Briefing, Villegas warned that the growing number of people, particularly in China, could pose a threat to food security and water
resources.

With this, the country and private businesses must adopt a proagricultural investment stance that will increase funds to help farmers drum up production, improve their access to farm implements and postharvest facilities, modernize their processes, improve irrigation facilities and create farm-to-market roads.

“The next crisis will be food and water. This is why we need to fix our farm-to-market roads and irrigation facilities. We can become an important source of food for China,” Villegas said in his presentation, titled “The Philippine Economy on the Road to Recovery,” delivered in Makati City.

“China will turn to its neighbors in Southeast Asia for food. We need to have a surplus of food to be able to [meet the demand],” he added.

Villegas said, however, that when the government, businesses or the next administration formulate programs and projects to help the agriculture sector, there is a need to focus on high-value commercial crops  such as bananas, mangoes, pineapples and all kinds of vegetables.

He also said “large-scale” investments in agriculture are not necessary since some crops like rice “do very well” even in small tracts of land.

Villegas said this is also the argument against the common misconception that the Comprehensive Agrarian Reform Program (CARP) failed due to fragmentation.

He said CARP could have been more successful if the government only provided support or extension services
to farmers who were recipients of the program. He said the failure of the CARP was due to the government’s neglect in providing post-harvest facilities, irrigation and others to assist farmers.

“The failure of CARP is that we gave farmers a hectare of land and told him, ‘D’yan ka na, ikaw na bahala [It’s yours; fend for yourself],” Villegas stressed.

Villegas said the government’s neglect of agriculture has set back the country in agricultural development by 20 years. He said it was only during the time of President Estrada, through his agriculture secretary and now Sen. Edgardo Angara, that the government started to reinvest in agriculture.

He said under the term of President Aquino, the government was busy defending democracy through the seven coup d’états that rocked her administration, while the Ramos years focused on the government’s struggle to put “light” back to the streets of Metro Manila.

This is why, Villegas said, the government was only able to start reinvesting in agriculture during the brief term of President Estrada. He said in the two years that President Estrada was in office, the government embarked on developing or rehabilitating irrigation facilities and constructing farm-to-market roads.

This, Villegas said, was continued in the Arroyo administration but should not stop in 2010 when the President steps down. The next administration should continue these investments as well as increase investments in education.

Investing in education could allow the local business-process outsourcing (BPO) industry to move from just being call centers to being knowledge-based centers, according to Villegas. He said China is already preparing to invade the call-center industry by teaching English in schools.

When that time comes, Villegas said, there would be more Chinese who speak very good English than Filipinos. He thinks shifting to a knowledge-based BPO industry like higher-value services, such as animation and architecture, could be a more stable source of BPO growth.

It would also do well for the next administration to focus on allowing the peso to depreciate to around P52 to $1—in order, he explained, to drive domestic consumption through overseas Filipino workers’ (OFW) remittances, as well as provide some incentive to exporters who may be prejudiced by a strong peso.

This year, he expects OFW remittances to reach P17 billion, and projects that the peso-dollar exchange rate will be at P50 to $1. This will mean that OFW families will have enough to spend and boost domestic consumption toward the end of the year.

A depreciated peso, Villegas added, will also encourage food manufacturers to start looking for new markets, particularly in Indonesia where there are at least 220 million people.

He said companies like Nestlé have already started this trend and such can continue, especially if the next administration also boosts agriculture production.

Written by Cai U. Ordinario

Source: Business Mirror

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The Philippines is relaxing its restrictions on Japanese beef imports after the Office International des Epizooties (OIE) reported that Japan has controlled Bovine Spongiform Encelopathy (BSE) or mad-cow disease. Agriculture Secretary Arthur Yap said the Philippines will now allow beef products derived from all ages of cattle aslong as they are devoid of any nerves and other BSE-specified risk materials. Mr Yap also ordered the inclusion of the slaughter of the cattle of the production date in the packaging label.

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11 August 2009] Singapore's National Development Minister Mah Bow Tan wants Singaporeans to look at investing in overseas food zones to ensure that when food supplies are threatened, Singapore can depend on alternative sources. He said companies will be encouraged to work with farms overseas to ensure that Singapore has a ready and stable supply of produce. He added that the volatile food prices in recent years exposed the island state's vulnerability and this move should mitigate supply shortages and sharp price increases in the long term.