January 14, 2004

 

 

Philippine Feedmillers Ask For Duty-Free Corn Imports

 

The Philippine feedmilling industry has asked the government to allow duty-free imports of corn due to high costs of the yellow grain in the international market, an industry official said Wednesday.

 

The request was made by industry officials at a meeting held Friday with Agriculture Secretary Luis Lorenzo, the official said.

 

The government should temporarily allow duty-free corn imports until world market prices stabilize at lower levels, the official said. The tariff on Philippine corn imports is 35% to 50%.

 

The official said U.S. corn imports cost about $170 a metric ton, cost and freight basis. This is much higher than the cost of Chinese corn imported around the first quarter of 2003 in a price range of $110-$112/ton, C&F basis, the official said.

 

The U.S. is now the only available source of corn imports as China and India have already restricted their grain exports. Argentine corn is also limited, the official added.

 

Corn is a major feed ingredient for the poultry and livestock industries.

 

In addition to the traditional increase in demand for meat products during the holiday season causing prices of local chicken to soar, the high cost of feedmilling materials was another contributory factor, the official said. Chicken prices surged to as much as 130 to 140 pesos ($1=PHP55.40) a kilogram in December last year from PHP80-PHP90/kg previously.

 

The official added that local corn costs about PHP11/kg ex-Manila, compared with a year-ago level of only PHP7.80 to PHP8.00/kg.

 

Lorenzo said in a statement Wednesday that the department will decide on duty-free corn imports in two weeks' time as he needs to consult first with local corn farmers.

 

The Philippines produces only about 4.5 million tons of corn annually, falling short of its annual consumption of around 5.5 million tons.