October 26, 2004

Philippine 2004 Corn Imports to Fall 80% On Year

Corn imports in the Philippines this year are likely to be limited to the 9,389 metric tons of corn already brought in. This figure is an 80% drop from last year's estimated 48,000 tons, a feedmill industry official said Monday.

Ric Pinca, vice president of the Philippine Association of Feed Millers Inc., said the bulk of the imports, or around 9,144 tons, were brought in at zero-duty in May this year.

To counter high prices in international corn markets earlier this year, the government approved 350,000 tons of zero-tariff corn imports for industrial end users. However, even with the tax break, the corn remained too expensive to import in large volumes.

The remaining 245 tons of corn were imported at the lower minimum access volume, or MAV, tariff rate of 35%. For this year, the MAV for corn was pegged at 212,119 tons.

The MAV is the lowest volume of agricultural imports the country needs to bring in at a preferential tariff rate as part of its commitment to liberalized trade. Corn imports outside the MAV quota are assessed a tariff of 65%.

Pinca said the Philippines is unlikely to import more corn this year due to the bumper supply of local corn.

Current local prices of corn range between 8.50-8.80 pesos a kilogram, down from a high of PHP12/kg in June. The drop in prices has been attributed to the ongoing corn harvest in Cagayan Valley, a major corn-producing region in the country.

Pinca said imports of feedwheat for the year will fall to 567,000 tons from around 1 million tons in the previous year.

The reduced level of feedwheat imports may also be attributed to the high level of wheat prices this year in international markets. Wheat of Chinese or Indian origin is currently priced around $150-$160/ton, down from an average price of $100/ton in 2003, Pinca said.

Philippine corn production for the year is projected to reach 5.3 million tons, up 728,949 tons from the previous year's output