January 15, 2009

Philippine feed millers, along with livestock and poultry raisers, reiterated Wednesday (January 14) their request for the government to allow them to import up to 300,000 tonnes of corn at zero tariff amid record prices of the grain in the local market.

 

If approved, the request, made through a letter to Agriculture Secretary Arthur Yap, would "balance out the cost of buying local corn at a high price and importing the grain at a lower rate," said Gregorio San Diego, president of the United Broiler Raisers Association.

 

Local corn prices soared early this week to record levels of PHP24 (US$0.50) to PHP26 (US$0.54) a kilogramme from an average price of only PHP13.32/kg in 2008 due to tight domestic supply.

 

By comparison, the cost of importing corn duty free would translate to a landed price of only PHP12/kg.

 

The group had initially made the request in November last year amid projections of tight domestic supply by the beginning of the New Year.

 

However, an interagency committee on rice and corn led by the agriculture department rejected the call last week and insisted that corn importers must pay the regular tariff of 35 percent, at which the landed cost would translate to PHP14/kg.

 

Renato Eleria, vice-chairman of the National Federation of Hog Farmers, Inc., said government figures on crop production have proved to be unreliable as evidenced by the fact that corn prices are high despite projections of an increase in local production.

 

Based on the government's latest production survey, corn output in the first three months of the year would rise 3 percent to 2.05 million tonnes, as farmers were likely to plant more due to favourable weather conditions and state subsidies on seeds and fertiliser.

 

In 2008, corn output rose 3 percent to 6.95 million tonnes from a year earlier.

 

Amid declining supply, a group of feedmillers and livestock raisers last month imported 90,000 tonnes of corn from Brazil. An initial volume of 55,000 tonnes was contracted in early December, followed by a 35,000-ton deal.

 

The imports are for arrival within January. The bulk of the volume was imported by food and beverage conglomerate San Miguel Corporation, which has a feed and poultry division.

 

Corn is a major component in livestock and poultry feed.