AN invitation to export more fish to China extended to the Philippines by the China Asean Marine Product Exchange (Campe) this week is just the latest in a series of export deals in the last six months that will benefit the local agriculture and fisheries sectors.
An official from Campe said China’s import volume for marine products was about two million metric tons annually, with a value at least 30 billion yuan (about P217 billion), and that the Chinese market had already developed a taste for Philippine bangus (milkfish).
China is also looking to increase imports of other seafood products, including crab, shrimp, prawns, and tuna, the official said.
Campe is a state-run firm formed in 2013, which already handles about half of the world marine products trade according to recent reports, mainly due to the enormous size of the market in China.
Recovery in 2016
A report by the Oxford Business Group (OBG) at the beginning of this month noted that the Philippine agriculture industry expanded strongly in 2016 after overcoming the impacts from several natural disasters.
This month, the country signed an agreement worth $1 billion to increase exports of agricultural products to China, which was a follow up to a $100 million farm produce agreement signed ahead of President Rodrigo Duterte’s state visit to Beijing last October, OBG said.
“The agreement with China represents a significant boost for the agricultural sector in the Philippines, with the value of the deal roughly equivalent to revenue from farm exports for the fourth quarter of last year,” OBG analysts explained.
Trade Secretary Ramon Lopez told reporters at a press conference following the signing of the latest agreement that products covered by the deal include durian, avocado, banana, pineapple, coconut, mango, dragon fruit, mangosteen, marang, rice, coffee, cacao, and chicken and duck meat.
OBG said the increase in trade should come as a relief to Philippine farmers, whose access to the Chinese market was partially interrupted last year. China restricted imports of some Philippine products over concerns about high levels of pesticides, specifically in bananas, and pest infestations found in some shipments.
“Increased export opportunities could see higher levels of investment flow into agriculture and the agri-processing industry, as both primary producers and downstream sectors seek to take advantage of rising overseas demand,” OBG said.
The OBG report said that last year’s restrictions by China on some agricultural imports highlighted a challenge faced by many Philippine farmers, and one that could restrict gains from new markets.
“For the Philippines to capitalize on its agricultural export potential, primary producers and the authorities will need to strike a balance between combating plant infestations and keeping the use of chemicals within the limits set by trading partners.
While chemicals are necessary for some crops to be pest-free, a requirement of most import markets, pesticide residue found on fruit and other produce at above-mandated levels could result in shipments being rejected or destroyed. This was the case in China last year, when 35 tons of tainted bananas were dumped,” the report explained.
Late last year, South Korea, another key export market for the Philippines, announced new regulations on fruit imports that set a target of zero chemical pesticide contamination. This will likely put increased pressure on Filipino exporters to maintain their strong market share, particularly in bananas, OBG said.
On the other hand, local efforts to combat natural pests with less reliance on chemical pesticides are paying off.
In October, shortly after the first large-scale agricultural export deal was reached with China, the Philippines and Australia upgraded their specific commodities understanding (SCU) to allow for the export of locally grown mangoes.
The revised SCU acknowledged the Philippines’ status as being free of the mango seed and pulp weevil, with the exception of mangoes grown in Palawan, where the pests have not yet been brought under control.
“The relaxing of these restrictions on mango exports is a major step forward for producers, as Australia has some of the world’s tightest agricultural import safety and quality controls,” OBG said in its report. “Receiving their green light for imports could encourage other strictly regulated markets to open up further to Philippine produce.”