October 31, 2011

Philippine feed millers may import 100,000 tonnes duty-free corn for Q1 2012

The Philippine Association of Feed Millers Inc. (Pafmi) will ask the government to import 100,000 tonnes of yellow corn to beef up stocks in the first quarter of 2012.

In a letter to Agriculture Secretary Proceso J. Alcala, Pafmi cited high prices due to the lack of good quality corn as well as the expected tightness in supply in the early part of 2012 as reasons for seeking the suspension of tariffs on yellow corn.

Pafmi president Norman C. Ramos in his letter to the Department of Agriculture (DA) said the two successive typhoons Pedring (international name Nesat) and Quiel (Nalga) that battered Northern Luzon adversely affected the quality and price of corn as its acceptance of parameters have been reduced to make way for higher moisture content.

The lack of good quality corn, said Ramos, has caused corn prices in Bulacan trading posts to increase to PHP16.50 (US$0.38) per kilogram from PHP12.90 (US$0.30) per kilo.

Ramos said industry surveys indicate delayed planting intentions of corn farmers which will affect supply in the early part of next year. Although there are planned importations of feed wheat, this will not substitute for corn requirements of the poultry industry, he added.

To ensure that prices will not go down drastically during harvest, Pafmi said that the imports will arrive only between the months of January to March.

Ramos pointed out that the volume feed millers want to import at zero duty will not have an adverse impact on demand and prices.

The 100,000 tonnes of corn will account for only 13 percent of the total requirement estimated for the first quarter of 2012" he said.

Earlier, hog raisers belonging to the Pork Producers Federation of the Philippines Inc. (Propork) asked the government to allow them to import around 50,000 tonnes of corn at zero duty for six months following the spike in the average price of locally-produced yellow corn.

The Philippine Maize Federation (Philmaize), however, rejected the proposal of hog raisers to import corn at zero duty for six months.

Philmaize president Roger Navarro said that while hog raisers cannot be prevented in importing, they should also pay the right taxes and import duties.

As a signatory to the World Trade Organization (WTO) and the Asean Free Trade Area (AFTA), any local trader may import corn for as long as they pay the corresponding duties and taxes.

Under the WTO, the Philippines slaps a tariff of 35 percent for corn that will be shipped into the country under the minimum access volume (MAV) scheme and 50 percent for those outside of MAV.

The MAV refers to the minimum volume for specific agricultural products that members of the WTO have agreed to allow to enter their borders at lower-than-regular tariff rates.

For this year 2011, the MAV for corn is pegged at 216,940 tonnes.

Corn imported from neighbouring countries belonging to the Association of Southeast Asia are slapped a tariff of five percent under the Asean Free Trade Area.