January 6, 2009

Philippine feed millers have already imported since October last year more than 300,000 tonnes of wheat, mostly from the Ukraine, an industry official said Monday (January 5).

Contract prices ranged between US$226 and US$138 a tonne, cost and freight basis, for delivery from January to May this year, said the official, who requested not to be named.

Aggressive buying of feed wheat followed an executive order issued in November last year that removed a 3 percent tariff on imported feed wheat.

"End users are taking advantage of the tariff-free privilege," the official said.

At an import cost of US$138/tonne, the landed cost would translate to about PHP7.60/kilogram, compared with a prevailing local price for corn of PHP15.50/kg, the official said.

While domestic corn prices may fall around May, when local farmers harvest the summer crop, prices aren't likely to go below the PHP12/kg level, he said.

Wheat and corn can substitute for each other as a major component of livestock and poultry feed.

The Philippines resumed importing feed wheat in October of last year following substantial cuts in world market prices from previous record levels.