January 14, 2009

Philippine imports of feed wheat could reach 1 million tonnes if prevailing record prices of local corn are left unaddressed, a feedmilling industry executive said Tuesday (January 13).

 

This would be a significant increase from feed wheat shipments of around 100,000 tonnes in 2008, the executive said.

 

About 300,000 tonnes are already scheduled for arrival from January to May this year.

 

Local corn prices soared Monday due to tight supplies to a record PHP25 (US$0.53) per kilogramme, from an offer price of PHP18/kg (US$0.38) Friday, and more than double from the government's price support price of PHP11.50/kg.

 

The current price of imported wheat, on the other hand, translates to a landed cost of around PHP11/kg.

 

"(Without more local corn) it's possible imports could exceed 1 million tonnes, but actual imports would depend largely on prices in the global market," the official said.

 

Another executive said he is optimistic that the agriculture department will implement programs to boost domestic corn output and lower local prices.

 

"The department's output figures are definitely bloated but hopefully they will learn from this and prices could ease from April onward," said Renato Eleria, vice-chairman of the National Federation of Hog Farmers, Inc.

 

Feed milling and livestock executives are scheduled to meet with agriculture officials Wednesday, apparently to discuss prevailing high corn prices, he said.

 

"But our imports for the year would definitely exceed half a million tonnes," he said.

 

Last week, a Philippine interagency committee on rice and corn led by the agriculture department rejected a call by local feed millers for tariff-free imports of up to 300,000 tonnes of corn. The regular tariff is pegged at 35 percent.

 

From 2001 to 2006, Philippine imports of feed wheat hovered around 1.5 million tonnes. Following steady increase in global prices, imports fell to 400,000 tonnes in 2007.

 

Corn and wheat can be substituted for each other as a major component in livestock and poultry feeds.

                                       

US$1 = P47.21 (January 14)