January 16, 2009

The Philippine Department of Agriculture has offered to import up to 200,000 tonnes on behalf of local feed millers and livestock and poultry raisers to address problems associated with record high local prices of the grain, industry officials said.

 

The imports would be in addition to volumes undertaken under quotas in a minimum access volume mechanism, which allows for a tariff of 35 percent as opposed to an out-of-quota tariff of 50 percent, an agriculture official said.

 

The in-quota volume for 2009 has been pegged 216,000 tonnes.

 

The plan to import 200,000 tonnes for local end-users follows a decision Wednesday (January 14) by the department to reject a request by local feed millers to import up to 300,000 tonnes of corn tariff-free.

 

Under the agriculture department's plan, the state-owned National Food Authority will import the volume under its tax expenditure subsidy program. This would allow the NFA to bring it in at the lower tariff of 35 percent.

 

"We don't want to use our in-quota allocation just yet. It's only January and who knows whether we will get into another emergency situation later in the year. We want to preserve our allocation for now," said another feed milling executive.

 

Local corn prices soared early this week to record levels of PHP24-PHP26/kilogramme (US$0.51-US$0.55/kg), from an average price of only PHP13.32/kg in 2008.

 

The cost of corn imported at a 35 percent tariff would translate to a landed price of only PHP14/kg.

 

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