February 15, 2007

 

Philippines plans to buy 400,000 tonnes cheaper corn

 

 

The Philippine Department of Agriculture has approved a request made by the poultry, livestock and feed mill industries to bring in 400,000 tonnes of corn at zero duty, an industry executive said Wednesday (Feb 14).

 

Final approval, however, will have to be made by President Gloria Macapagal Arroyo for the plan to materialise, the executive said.

 

Members of the poultry, livestock and feed industries earlier asked the government for permission to buy up to 700,000 tonnes of yellow corn at zero duty.

 

"Everyone agreed there was a shortage, but local corn producers thought (an import volume of) 700,000 tonnes was too high, so a compromise was made to import 400,000 tonnes," he said.

 

Half of the volume will be brought in the first half of the year while the remaining half will come in the second semester, he added.

 

Agriculture Secretary Arthur Yap said a decision on the request will be made on Monday next week.

 

The request for duty-free corn imports was made last month after domestic corn prices rose to around 12.50 peso (US$0.25) a kilogramme, from a price level of around 10.80 peso/kg a month earlier.

 

The current tariff duty on corn import ranges between 35-50 percent. The lower 35 percent applies to imports under the minimum access volume mechanism.

 

The mechanism refers to the minimum volume of sensitive farm products that the Philippines must bring in at preferential tariff rates. Imports outside of the mechanism are given the higher tariff of 50 percent.

 

Corn production in 2006 reached 6.1 million tonnes, up 11 percent from a year earlier.

 

Despite higher corn output last year, domestic prices are at lofty levels on strong demand from the livestock sector, the official said.

 

Corn is a major component of livestock and poultry feeds.