March 29, 2004

Philippine 2004 Corn Output Forecast To Hit 5.5-5.7 Million MT

Philippine corn output this year is expected to reach a record 5.5 million-5.7 million metric tons with local farmers increasing planted area amid strong domestic prices, a senior official of the Department of Agriculture said Monday.
 
Artemio Salazar, program director at the Department of Agriculture for corn, said this year's projected output is be 12% higher than the country's highest corn output of 4.9 million tons recorded in 1991.
 
If the projection is achieved, 2004 output would be 20%-24% higher from last year's output of 4.6 million tons, Salazar said.
 
According to Salazar, output in the first quarter alone is expected to reach 1.526 million tons, up 13% from the year-ago level on increased harvest area and favorable weather. Second-quarter output may reach 726,000 tons based on planting intentions from a production survey conducted in January this year.
 
Production trends in the past 10 years show January-June output usually accounts for 40% of the total annual production with the remaining 60% in the July-December period, Salazar said.
 
"We're expecting to produce 2.2 million tons in the first half alone. If combined in ratio and proportion, we will hit at least 5.5 million tons this year," Salazar told Dow Jones Newswires.
 
Due to the prevailing high prices of corn in the local market, however, farmers are likely to increase the harvest area during the main crop planting in May.
 
"We are optimistic that farmers will even double their planting intentions because local prices are favorable to them. We might produce up to 5.7 million tons," Salazar said.
 
Bullish corn prices are attributed mainly to tight supply after strong typhoons in July and August last year devastated many corn plantations.
 
High prices of corn and wheat in the world market further boosted local prices. Corn and wheat are major ingredients in animal feeds.
 
At the start of the year, local corn prices rose as high as 12 pesos ($1=PHP56.42) a kilogram from PHP6-PHP6.50/kg a year ago.
 
Ongoing corn harvests in some parts of the country have softened local prices to a range of PHP8.70-PHP9.30/kg, Salazar said.
 
Salazar said plans by the state-owned National Food Authority, or NFA, to import up to 350,000 tons of corn to meet an expected domestic shortfall this year aren't likely to damp local prices or prevent farmers from aggressively planting the yellow grain.
 
The NFA wants to buy up to 350,000 tons of corn in a tender scheduled April 2 to increase domestic supply. The NFA imports corn at zero tariff on behalf of the poultry, livestock, and feed milling industries.
 
According to Salazar, an import provision that the NFA won't sell imported corn below PHP11/kg will support local corn prices.
 
"Unlike in the past, imports have lost their terror (element). We know their not that threatening," he said.
 
However, the projected bountiful harvest this year poses a problem of providing post-harvest facilities to farmers, Salazar said.
 
"We have been so successful in generating the interest of the farmers to plant, but we'll have a problem post-harvest starting July," Salazar said.
 
Philippine corn farmers are in desperate need of dryers, shellers and storage facilities to prevent post-harvest losses, he said.
 
According to him, the agriculture department is working out an arrangement with the NFA for the latter to lend its drying and storage facilities to corn farmers.