Philippine feedmillers import 80,000 tonnes of Thai corn
 

"The arrival of the imported corn was set between January to May. We had to import yellow corn because of the damage caused by El Niño," said a source from the Philippine Feedmillers Association Inc.

To date, the Department of Agriculture (DA) said the dry spell has already damaged around 500,000 tonnes of corn. Figures released by the Bureau of Agricultural Statistics (BAS) on the first-quarter performance of the farm sector showed that corn production was down by 16.8% to 1.6 million tonnes.

Yellow corn is the main ingredient used by animal feed producers. The production of yellow corn was slashed by almost 20% to 1.15 million tonnes in January to March this year. The figure is 286,000 tonnes lower than what was produced in the same period last year.

BAS, an attached agency of the DA, projected that corn production from January to September will be on the downtrend, with production declining by 17% to 4.64 million tonnes during the period.

The landed cost of the imported Thai corn is pegged at PHP13.50/kg (US$0.29), including the 5% tariff. The landed cost of the imported corn is on a par with the domestic price of local yellow corn. "If we did not import corn, the domestic price would have been higher," the source said.

Corn trade in Southeast Asia has been liberalised after a free trade scheme among members of the Association of Southeast Asian Nations (Asean) took effect on Jan 1 2010. Under the Asean Free Trade Agreement (FTA), the duties on most farm products, including corn, went down between 0 to 5%.

Aside from importing from neighbouring Asean countries, end-users also have the option to source from other countries under the so-called minimum access volume (MAV) scheme. Around 200,000 tonnes can still be imported under the MAV scheme, a mechanism which allows traders to ship corn into the country at a lower duty.

Despite projections of lower corn production for 2010, feed millers said they are no longer looking at the possibility of importing more yellow corn for the year.

For one, demand for animal feeds is low due to diseases that ravaged hog farms, as well as the low demand among consumers for pork and poultry products. Also, the source said there will be enough feed wheat since feed millers have contracted 844,000 tonnes of the alternative feed ingredient for the year. To date, industry figures show that more than 500,000 tonnes of feed wheat have already arrived in the Philippines. The remaining volume is expected to arrive in the country until October.

Figures released by the National Disaster Coordinating Council showed that the damage caused by the dry spell on the farm sector has already topped the PHP12billion (US$0.25 billion) mark. The figure is higher than the DA's low-end estimate of PHP8 billion (US$0.17 billion).

Economists said earlier that the worst is not yet over for the farm sector as there is the possibility of the La Niña, which could flood farmlands and destroy more crops.