June 30, 2009

The Philippines, Southeast Asia's second-biggest importer of wheat, is unlikely to buy any more feed grains this year after covering a supply shortage with shipments in the first half, an industry executive said.

 

National Corn Board executive director Butch Umengan said next orders will likely be for January delivery, adding that the shortfall in feed grains was no more than 1 million tonnes this year.

 

A lack of Philippine purchases may extend a slide in prices of wheat and corn, which are used to make animal feed.

 

Wheat futures have fallen 21 percent from an eight-month high on June 1, while corn is headed for a third weekly drop after reaching a seven-month high on June 3.

 

July-delivery wheat was little changed at US$5.3325 a bushel on the Chicago Board of Trade, down 4 percent this week. Corn for December delivery lost 0.3 percent to US$4.005 a bushel, down 4.5 percent this week.

 

Philippine feed millers and meat producers boosted purchases after the shortage pushed up local prices in December and the government granted an exemption on a wheat import tax.

 

Umengan said millers and hog producers bought 1.1 million tonnes of feed wheat and 565,000 tonnes of corn this year, noting that the country did not import feed grains in the 18 months through January.

 

The tax break on feed wheat lapsed June 21 and was unlikely to be extended, said Gary Olivar, deputy spokesman for economic affairs.

 

Wheat or corn account for about half of the ingredients in animal feed, while soymeal makes up 20 to 25 percent.

 

Umengan added that Philippine feed wheat imports might decline next year as farmers were forecast to boost corn planting, spurred by lower fertiliser prices and the government's decision to raise the price that the National Food Authority pays them for their crop.

 

The government issued an order in May raising the so-called support price for corn to PHP13 per kilogramme from PHP11.50.

              

US$1 = PHP48.009 (June 30)