September 29, 2008

Philippines to boost corn production by another 15 percent

The Philippines is looking at raising its domestic purchase price for yellow corn by another 15 percent in a bid to boost production, according to a senior official.

The country, which accounts for just 1 percent of world corn output, produced 3.29 million tonnes of the crop in the first half, slightly higher than its goal of 3.22 million tonnes.

The government last month raised its buying price for yellow corn to PHP10 a kilogramme from PHP7.5, still below the PHP13 sought by corn farmers who face escalating fertiliser prices that deter them from planting.

Jessup Navarro, head of the National Food Authority said the agency planned to buy 50,000 tonnes of yellow and white corn this year. The government has set a corn production target of about 7.4 million tonnes this year, up 9.5 percent from 2007.

Officials said rising fertiliser costs put at risk a second-half corn production target of 4.16 million tonnes.

The Philippines has not imported corn so far this year due to high global prices of the commodity. Industry officials have said the landed price of imported corn with zero tariff now would be at PHP18 per kg, sharply higher than the average price of PHP11 in the domestic market.

Yellow corn makes up nearly two-thirds of total Philippine corn production while the rest is white corn, used mainly for food.

PHP1 = US$0.0213 (September 29, 2008)