Feed millers seek duty-free corn importation

Philippine feed millers are seeking government permission to import 100,000 metric tons of yellow corn duty-free.

The typhoons and flooding that hit Southeast Asia hampered deliveries from Thailand and jacked up the prices of Philippine stocks.

Yellow corn is the main ingredient in the production of livestock feeds.

Yellow corn imports are slapped with a tariff of 35 percent.

A local trader said feed millers were no longer expecting the delivery of some 60,000 tons of yellow corn from Thailand, which was supposed to arrive in the last week of October.

The trader said local feed millers could get supply from China and the United States, which have stocks that could be readily shipped.

Philippine Association of Feed Millers Inc. (Pafmi) president Norman Ramos said in a letter to Agriculture Secretary Proceso J. Alcala that the 100,000 tons would make up only 13 percent of the requirements for the production of livestock feeds from January to March 2012.

The volume is not expected to drive down the prices of local corn, Ramos said. Feed wheat can replace yellow corn in hog feeds but apparently not in poultry feeds.

“Acceptance parameters of corn have been reduced to make way for higher moisture content; as a consequence, corn prices have increased from P12.90 to P16.50/kg,” Ramos said.

Also, Pafmi said industry surveys indicated delays in the planting intentions of corn farmers, which would affect supply in the early part of 2012.

Philippine corn farmers, however, said their prices had gone up only “slightly.” Prices, they said, were expected to drop starting December up to February 2012. By then, feed millers will have taken delivery of feed wheat, the Philippine Maize Federation (Philmaize) president Roger V. Navarro said.

“If we allow tariff free importation, it will discourage farmers from planting in the next crop season because they know prices will artificially crash with so much supply in the market. If farmers don’t plant, we will really have supply problems and prices will really shoot up, like a self-fulfilling prophecy,” Navarro said.

Navarro said that according to information from member-farmers, yellow corn was selling at P14.50 per kilogram in Luzon and even lower at P13.80 in Mindanao. “It’s not even close to the P31 or P28 per kilo levels which we experienced before,” Navarro said.

The Bureau of Agricultural Statistics (BAS) may cut third-quarter production estimates for corn and palay although corn inventories remain high, director Romeo S. Recide said earlier.