October 20, 2014

Philippine feed millers find imported wheat cheaper than local corn

Philippine animal feed manufacturers said they have resorted to using the lower-priced imported wheat because of higher-priced and scarce local corn that they claimed were being hoarded by traders.

Local feed millers normally use 50% corn, 25% soymeal and 25% polard, plus multivitamins, fishmeal and coconut oil.

Industry insiders said feed millers were forced to source corn abroad, although the Department of Agriculture insists the country has more than enough supply of it. But millers said local corn was more expensive - if they could find it at all.

Data from the Philippine Bureau of Agricultural Statistics (BAS) showed that corn production was up by 4.7% to 3.48 million tonnes in January-June 2014 from 3.32 million tonnes last year. Production forecast for the period July-September, however, is lower by 7.8%, from 2.60 million tonnes last year to just 2.40 tonnes.

The October-December production is again forecast to increase by 18.9% from last year's 1.72 million tonnes.

Feed millers claimed that landed costs of imported corn were lower than those of local corn, saying that Northern Luzon corn priced from PHP15/kg (US $0.33/kg) to PHP16.50/kg (US$0.37/kg) were being sold in Central Luzon at the landed price of P17/kg (US$0.38/kg) to PHP18/kg (US$0.40kg).

Feed millers also said their total wheat import may reach 1.2 million tonnes this year and that they would be importing more in the first quarter next year to drive down prices of local corn.

They added that they even plan to import more corn and soy since they are allowed by government to import "as long as prices of the local corn are not competitive".

An industry insider said some 800,000 tonnes of feedwheat arrived in the Philippines during the last few months owing to lower prices of Black Sea and Australian wheat. Landed cost of feedwheat averaged PHP13/kg (US$0.29kg).