November 11, 2008


Gap in Philippine corn output may rise on costly input



Philippine corn output this year could fall substantially from the government's forecast of 7 million tonnes, which could further increase a shortfall in local supply, an industry executive said Monday (November 10).


"The country's shortfall in corn output may rise from 7 percent," said Roger Navarro, president of Philippine Maize Federation, Inc., noting that the government's decision to peg its support price for corn at PHP11.50 a kilogram against the desired level of PHP13/kg has discouraged planting of the crop amid high costs of inputs.


"A support price of PHP13/kg would have given an incentive for farmers to plant more," he said.


Local farmers had been asking for a PHP13/kg support price.


According to Navarro, falling prices of wheat in the global market could further limit corn planting for next year, as local feed millers are likely to use cheaper wheat instead of corn.


Amid sharp declines in global prices, local feedmillers and traders resumed contracting wheat imports last month after almost a one-year hiatus. They have so far signed contracts to buy more than 120,000 tonnes of Ukraine wheat.


The latest purchase, contracted in late October, involved 42,000 tonnes at US$161.50/tonne, C&F basis, for shipment between December 15 to January 15.


Navarro said a likely delay in the industry's plan to export corn to South Korea and Taiwan could further exert pressure on local prices and deter farmers from planting the crop.


The group is set to meet with agriculture department officials within the week to consolidate data on the country's corn output, he added.


Last week, Agriculture Assistant Secretary Dennis Araullo, the department's program director for corn, said this year's corn output may only reach 6.9 million tonnes amid high fertilizer costs and slower demand from the livestock sector.


Corn and wheat are major components in animal feed.

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