Market Event

President Duterte has approved a plan to boost pork imports to counter soaring prices amid an ASF outbreak, Cabinet Secretary Nograles said on Thursday. Nograles said the President approved during Wednesday’s Cabinet meeting the Department of Agriculture’s (DA) recommendation to expand the minimum access volume (MAV) allocation for pork imports.

Opinion

We note that current MAV for pork imports stands at 54,210 MT with a 30% tariff for importers falling within the MAV, while a 40% tariff is levied on those outside the designated quota. While increasing the MAV limit would help control supply-driven price surges and consequently temper margins of URC (Target Price: P148.00) and FB (Target Price: P77.30), we expect this to be temporary as prices should normalize once ASF outbreak has been contained.

Additionally, impact should be minimal especially for FB as its beer segment (80% of EBIT) is expected to rebound given that we are not expecting to re-impose alcohol bans this year

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