Poultry growers and pig farmers see lower feed costs as one possible silver lining in the impending implementation of a free-trade scheme among members of the Association of Southeast Asian Nations (ASEAN).

Elias Inciong, vice president of the United Broiler Raisers Association (UBRA), told Business Mirror of the Philippines that alternative raw materials for feed, such as tapioca, could become cheaper due to the elimination of tariffs under the ASEAN Free Trade Area Common Effective Preferential Treatment (AFTA-CEPT).

"With tariffs at zero level, alternative-feed materials such as tapioca would be more affordable," said Mr Inciong, in a chance interview at the sidelines of a trade and investment mission of the United States Department of Agriculture in the Philippines.

Albert Lim Jr., National Federation of Hog Farmers Inc. (NFHFI) president, agreed that raw materials for animal feeds will become less prohibitive once the AFTA-CEPT goes into full implementation next year. Mr Lim noted that tapioca pellets used as feed input are slapped a tariff of 35 per cent.

Other feed inputs such as soybeans are slapped a tariff of one per cent, three per cent for soybean meal and three per cent for dried distillers grains with solubles (DDGS).

"Feed materials could become cheaper due to AFTA, but the source of the materials could pose a problem," he said.

The NFHFI chief said only Thailand produces surplus tapioca pellets, which the Philippines can buy.

As for yellow corn, Mr Lim noted that Indonesia does not produce enough for export to other Southeast Asian countries at zero tariffs.

Business Mirror reports that stakeholders in the livestock and poultry sector admitted that they are keen on Malaysia and Indonesia as possible sources of yellow corn. Under AFTA, the 35-per-cent tariff on yellow corn imposed by Manila will be removed.

Traditionally, the Philippines sources its yellow corn requirement from the United States, Argentina and Brazil whenever there is a shortage. Yellow corn makes up 50 to 60 per cent of animal feeds. Any increase in the cost of yellow corn in the domestic market will have a corresponding impact on the retail price of pork and dressed chicken.