July 8, 2009

The Philippines has decided to restore a 7 percent tariff on feed wheat imports, Trade Secretary Peter Favila said on Tuesday (July 7).

 

Import tariffs on both food and feed wheat were lowered to zero for six months from January to keep bread prices low and aid the local feed sector which was hit by high corn prices earlier this year. Feed wheat and corn are used alternatively as animal feed.

 

A government panel had recommended bringing back the 7 percent duty on feed wheat imports to encourage local corn farmers to boost output in the second half of 2009.

 

A group of hog farmers said earlier the 7 percent tariff equates to additional cost of PHP0.70 (US$0.014) per kg of imported feed wheat.

 

Philippine corn production is forecast to drop 2.5 percent to 3.21 million tonnes in the first half of 2009, according to government estimates, on unfavourable weather and decreased hectare devoted to the crop.

 

But the government expects corn output to rise 2.3 percent to 2.31 million tonnes in the third quarter.

 

The local feed industry has imported more than 1.1 million tonnes of feed wheat this year, scheduled for delivery until August, thanks partly to the zero-tariff.

 

That compares to just 112,000 tonnes in all of 2008 when surging prices turned off buyers.