Prices of processed food products are set to increase


There is no hope in sight in the next months for a reduction in the prices of processed foods such as canned goods, hotdogs and other products dependent on imported ingredients, as well as other products as bread and milk that depend on imported input.. This is due to the continuous increase in the prices of basic food products in the global market.

Based on the Bloomberg Agriculture Spot Index last April, prices of wheat, corn and soybeans have already soared to the highest levels in the global market since 2013. This is due to the low production in countries which export the said products and the importation of China of bigger volumes of these products for its industries.

Wheat is used in producing bread and other related products, while corn and soybeans are used as feeds. Soybeans is also used in producing soy sauce, tofu and other products.

The Philippines is affected by the increases as it fully imports its wheat supplies and 99% of its soy bean supplies. The impact of the increase in the price of feeds is felt in the country in the form of expensive pork and chicken meat in local markets.

On April 8, the Food and Agriculture Organization of the United Nations projected that the prices of oil, meat and milk will further increase.

In the past ten years, the import dependency ratio on food has been increasing. From 18% in 2010, it soared to 29% in 2019. This means that more than one-fourth of the total food supply in the country is dependent on the the supply or shortage of food products in the global market. The volume of imported commodities which increase annually include that of rice (23% of the local supply in 2019), pork, beef and chicken. Food and beverages manufacturers almost fully import their raw materials from other countries.

Prices of processed food products are set to increase