July 29, 2008


Philippines 2008 corn output may fall below target


Philippine corn output in 2008 may be lower than expected, as surging fertiliser costs could deter farmers from planting the crop in the second half of the year, a senior official of the Department of Agriculture said Tuesday.


Corn output this year could reach 6.9 to 7.2 million tonnes compared with the department's production target of 7.35 million tonnes, said assistant secretary Dennis Araullo.


According to Araullo, corn sowing may not take place in about 10-30 percent of the country's planting area in the second half of the year on higher fertiliser prices. This means production from July to December period could range between 3.6-3.9 million tonnes against a target of 4.1 million tonnes.


Fertiliser costs have risen by three-fourths to PHP 22,000 per hectare from PHP12,400 per hectare last year following a steady increase in fuel prices, he said.


"Farmers are now having second thoughts about planting. To make matters worse, domestic prices have gone done," Araullo said.


He said ample supply of the grain in the first half of the year has exerted pressure on local prices, currently hovering PHP 11 per kilogramme from PHP 14 per kilogramme a few months back.


Corn output in the first half of the year reached 3.29 million tonnes, up by almost 20 percent from an output of 2.75 million tonnes a year earlier.


To support corn prices and encourage farmers to continue planting, local growers have asked the department to increase government support price for the grain to PHP 12.50 to PHP 13.50 per kilogramme. The state-owned National Food Authority's support price for corn currently is PHP 7.50 per kilogramme.


However, the Inter-Agency Committee on Rice and Corn has recommended a support price of PHP 11 per kilogramme, Araullo said.


"The name of the game is to encourage farmers to continue planting. But this support price isn't acceptable to farmers," he said.


Lower than expected output in the second half of the year could boost domestic prices to around PHP 15 to PHP 16 per kilogramme in the last quarter of 2008 or first quarter of 2009, which could dampen livestock production in the country, he added.


Corn is a major ingredient for making livestock and poultry feeds. Feeds account for up to 60 percent of the cost of animal production.

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