Feed millers seek higher corn import volumes

The Philippine Association of Feed Millers Inc. (Pafmi), the biggest group of animal feed producers in the country, is pushing for higher import volumes for corn at lower tariffs to allow them flexibility to keep feed input costs low amid global supply chain disruptions.

“While the recent reduction in corn tariffs will help mitigate the impact caused by current global supply chain disruptions amid the long-standing shortfall in local corn production on the country’s animal feed producers, livestock and poultry raisers, and consumers, higher import volumes at lower tariffs are necessary,” said Pafmi in a statement.

The group is asking the Department of Agriculture (DA), through its MAV Management Committee, to finally decide on its proposal to increase the minimum access volume (MAV) or in-quota for corn to 2 million metric tons from the current 217,000 MT.

“This will cover the volume of corn importation for the second half of the year,” Pafmi said.

In May, President Duterte signed Executive Order No. 171, which lowered corn tariffs to 5 percent for in-quota and 15 percent for out-quota until end-December. In 2023, the rates will be increased to 35 percent for in-quota and 50 percent for out-quota.

Pafmi said the country was importing more than 4 million MT of feed ingredients including corn and corn substitutes needed by the livestock and poultry industries.

The imports augment local corn production, which stood at less than 6 million MT last year, according to the DA’s National Corn Program.

The group said the Russian invasion of Ukraine has affected the supply of feed wheat, which is being used as a corn substitute because of its lower price.

Together, Russia and Ukraine account for 30 percent of the global wheat exports and 20 percent for corn.

“This leaves local feed millers with little option but to rely on more corn imports; a higher MAV would provide for some flexibility in keeping feed inputs for local hog and poultry growers at a lower price,” it added.

Pafmi also said the supply situation was expected to improve later this year with other major corn-producing nations such as the United States set to begin their harvests in September.