June 2, 2009

Philippine commodity trading of corn is not yet feasible given the lack of post-harvest facilities and infrastructures that will ensure the quality of corn, industry leaders warned.

Philippine Maize Federation (Philmaize) chairman Roderico R. Bioco said he is not so confident in commodity trading of corn at this stage as the country do not have infrastructures for it.

Last week, Department of Agriculture (DA) secretary Arthur C. Yap announced that the National Food Authority (NFA) will buy 300,000 tonnes of corn to jumpstart the government's bid to engage in physical trading of corn in the third quarter.

Earlier, the government increased the buying price of corn to PHP13 per kilogramme from PHP11.50 per kilogramme to encourage farmers to plant amid low prevailing prices due to the influx of duty-free feed wheat imports.

Bioco said less than a tenth of the 6.927-million tonne corn output last year is covered by postharvest facilities.

He said at least PHP50 billion worth of infrastructures is needed to put in to cover the current output, adding that putting up infrastructures to cover all produce will need five years.

Government data show that lack of post-harvest facilities account for up to 15 percent of yield loses, which is targeted to be cut to 5 percent to 7 percent this year.

Corn, the main ingredient in animal feeds, makes up nearly two- thirds of the Philippines' total corn production while the rest is white corn, used as rice substitute.

In a forecast by the Bureau of Agricultural Statistics (BAS), first half corn production is expected to slip by 2.45 percent to 3.21 million tonnes year-on-year as harvest area and yield might drop by 0.47 percent and 1.98 percent, respectively.

US$1 = PHP47.171 (June 2)