April 28, 2008

 

Philippines considering scrapping duties on corn and wheat imports

 

 

The Philippine National Food Authority may cut import tariffs on corn and wheat imports to zero in a bid to stabilise the surging cost of rice in the local market, an official at the agency said Monday (April 28, 2008). 

 

Eliminating the 35-percent import tariff on corn would to help stabilize local prices, which have been rising in tandem with rice prices, the official said.

 

Imports of white corn would deter a significant portion of the population from switching to rice, helping to temper price increases.

 

"One way to manage the demand for rice is to keep corn eaters from converting to rice," the official said, noting that up to 15 percent of the country's population consumes white corn as their main staple.

 

The price of white corn in the retail market has risen by around 60 percent in the past year to around PHP32 (US$0.76) a kilogramme, which is about the same as the local price of rice, the official said.

 

Allowing imports of wheat without the current 3 percent import tariff would also help to reduce demand for rice, as the wheat can be used in the manufacture of cheap noodles, said the official.

 

The NFA, however, is a bit reluctant to import wheat as it has no previous experience in importing this commodity.

 

"The NFA is certainly studying this, but it will all depend on the cost. Importing corn and wheat at a zero tariff would help make these commodities cheaper and become viable substitute for rice," the official said.

 

The Philippines has stepped up its search for rice imports amid surging prices of the grain in both local and global markets.

 

The NFA has so far this year signed contracts to buy 1.5 million tonnes of rice out of an import quota of 2.1 million tonnes.

 

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