February 12, 2007

 

Philippine corn imports subject for zero-duty

 

 

The Philippines' zero-duty importation of corn is already foreseen as the continuous rise of the commodity in the world market could kill the local feed milling industry, reports the Manila Bulletin Daily.

 

The Department of Agriculture (DA) is compelled to approve a duty-free importation of corn by the Philippine Association of Feed Millers Inc. (PAFMI) by at least 200,000 metric tonnes (MT) considering corn's prohibitive price.

 

A PAFMI official disclosed that the rampant use of corn for ethanol has pushed world corn prices up as imported corn with a low tariff of 35 percent will still have a landing price of P15 (US$0.31) per kilo.

 

The official added that corn substitutes such as wheat is even more expensive, thus, the need for more stocks of corn.

 

Feed millers and livestock raisers have been asking for a 700,000 MT zero-duty corn importation from DA. However, the government wouldn't allow duty-free corn importation as it will have a political impact as election period nears.

 

But the official reveals that there is a certainly a shortfall of corn supply. With Philippine feed production comprising 8.4 million MT, only 3.3 million MT out of the needed 4.2 million MT of corn is consumed, resulting in a shortage of 1.1 million MT.

 

With such shortage, DA's approval of zero-duty corn importation may even reach to as much as 400,000 MT, the remaining 200,000 MT as a reserve in case of further shortage.

 

Corn imports are expected to arrive June or July this year, thus, the next corn harvest by September will be unaffected, said the official. 

 

The Philippine Maize Federation Inc had previously rejected the zero-duty corn import.

 

However, despite claims of increasing corn production (reaching to a record of 6.2 million MT in 2006), corn authorities also admit that local corn quality falls far lower than the globally recognised good quality corn which should have a moisture content of a maximum of 14 percent.

 

The feed milling sector has previously been depending on cheaper wheat as substitute for corn from China and once, India. But imported feed wheat, with the high cost, will now have a landed cost of P13.20 (US$0.27) per kilo, still higher than the local corn tagged at P11.80 (US$0.24) per kilo