September 6, 2010

Tight global grain supply to push Philippine corn prices up

Feed wheat scarcity and China's increasing demand for grains will pull up corn prices in the Philippines, corn industry stakeholders said.

This will give local corn farmers a chance to cash in and improve their competitiveness.

"China (the world's second-largest user of corn) being in the market will push prices to higher levels and set a new floor price," Philippine Maize Federation Inc. (Philmaize) chair emeritus Roderico R. Bioco said.

Sources in feeds and livestock businesses confirmed that market prices were rising and the increase was expected to continue toward December. This, as drought-stricken Russia - a major wheat exporter - said Thursday (Sep 2) it was extending its ban on exports to November 2011 (harvest time next year) from December 2010.

As feed wheat competes with corn as the main ingredient in livestock feeds, the pressure on consumers such as feed millers to look for alternatives heightens.

US corn is expected to take up the slack from Black Sea countries (including Russia) and other suppliers in Europe, Canada, Australia and Argentina that are dealing with either too-dry or too-soggy fields.

However, there are concerns the US may not meet its target corn production this year due to floods in low-lying fields and dry spells in the Midwest. Besides, US corn is enjoying huge demand from Egypt, the world's top wheat importer, in Russia's absence.

Meanwhile, the USDA will update production estimates on September 10, according to reports.