March 15, 2007

 

Philippines to buy 200,000 tonnes corn in April tender

 

 

The Philippine National Food Authority (NFA) is likely to hold an auction next month to purchase 200,000 tonnes of duty-free corn for meeting a domestic shortfall, a senior official said Wednesday (Mar 14).

 

"We are likely to hold the tender in April, since the intended arrival period is between June and July this year," said the official.

 

The NFA, a state-owned grain trading firm, has been instructed by the agriculture department to purchase the imported corn on behalf of local end-users which include feed millers and livestock and poultry producers.

 

According to the official, local end-users have agreed to an allocation of 30 percent of the volume to hog raisers, while poultry raisers and feed millers will be given an allocation of 35 percent each.

 

Ric Pinca, executive vice president of the Philippine Association of Feed millers Inc., said the NFA is likely to buy corn equivalent to US grade number 2.

 

Possible sources include the US, Argentina and China, he said.

 

Last week, Agriculture Secretary Arthur Yap granted permission to local end-users to bring in 200,000 tonnes of corn imports at zero tariff in response to rising prices in the local market. Another 200,000 tonnes may be brought in later this year, depending on domestic requirements.

 

Corn prices are currently hovering around 12 peso (US$0.25) a kilogramme from a level of only 9 peso/kg a year earlier.

 

The current tariff duty on corn imports is pegged at 35 percent.

 

Corn production in 2006 reached 6.1 million tonnes, up 11 percent from a year earlier.

 

Despite the higher corn output last year, domestic prices are at lofty levels on strong demand from the livestock, poultry and feed milling sectors.

 

Corn is a major component of livestock and poultry feeds.