March 20, 2006

 

Philippines may triple imports of feed corn

 

 

Philippine feed mills are expected to import more corn and soymeal this year due to an expected shortfall in domestic corn output and high poultry consumption due to the absence of bird flu, an industry official said.

The growth in poultry consumption has continued unabated due to the absence of bird flu in Phillippines, said Ricardo M Pinca, vice-president of the Philippine Association of Feed Millers Inc. Philippines' bird flu-free status in a region ravaged by the virus has also led to some export orders, Pinca said.

 

This would mean more imports of corn and soymeal, the major ingredients in poultry feed, as the country could not meet current demands due to adverse weather conditions that have hampered the corn crop, he said.

 

Feedmillers may triple their corn import to as much as 191,000 tonnes this year, the maximum millers can import at the concessional duty of 35 percent. Duties of 50 percent apply if imports exceed this amount.

 

Feed corn imports were less than 50,000 tonnes in 2005, Pinca noted.

 

Higher local prices is also a factor driving many feedmillers to import corn.

 

Philippine importers are currently buying most of their corn from China as freight costs from Chinese ports are much lower than that from other countries.

 

However, the Chinese government has yet to issue new corn export quotas after earlier quotas expired Feb 28. China is likely to become a corn importer itself as demand for corn increases in its own agricultural industry.

 

Rising prices in China have raised speculations that the country may not issue corn export quotas anytime soon. Corn exports are granted only to exporters with export quotas issued by the Chinese government.

 

The opening of a new port facility in Philippines' Luzon island with the facility to handle larger volumes of bulk grain will also help boost feed grain imports, Pinca said.

 

The new terminal, which would be at least 50 percent faster in unloading grain, will also lower freight costs. 

 

Pinca noted that ocean freight costs had been sliding the last few months, especially along the Pacific north-west-Philippines route, hinting that corn imports from the Americas may be another viable option.