May 25, 2010
Philippines to halt corn imports on weak demand
Philippine feed millers are no longer keen on importing corn despite a drop in domestic output due to weak demand from animal feed suppliers.
"The industry is not keen on bringing in more corn. We''re done importing for 2010," said an official of the Philippine Association of Feed Millers Inc.
Corn imports this year will likely amount to no more than 80,099 tonnes, from 344,945 tonnes in 2009.
Imported corn from Thailand arrived in batches from January to early May, contracted at US$250 per tonne or at a landed cost of PHP13 (US$0.28) per kilogramme. The price is almost on a par with domestically produced corn selling at a farm-gate price of PHP13.50 (US$0.29) per kilogramme.
The demand by hog and poultry feed suppliers has weakened, forcing many feed millers to pare production and plug their losses, the association official said.
Animal feed production is expected to decline by 10% to 4.9 million tonnes this year.
The association has booked up to 800,000 tonnes of feed wheat- a cheaper corn substitute- for delivery toward September 2010 to cover for the slack in imported corn. The landed cost of feed wheat is about PHP11 (US$0.23) per kilogramme.
"Should there be a surge in demand for animal feed towards year-end we might import additional feed wheat but not corn. We can book in November for December arrival," the official said.
This might be the most difficult year for feed millers, "probably because of the climate change factor. Animals are getting stressed. Raisers have started cutting down on volume," he said.
The severe dry spell caused by the El Ni？±o phenomenon has already damaged around 500,000 tonnes of standing corn crop, according to the Agriculture Department.
Corn production in the first quarter declined by 16.8% to 1.6 million tonnes from 1.94 million tonnes in the same period last year.
Yellow corn- the main ingredient in animal feeds- went down by 20% to 1.15 million tonnes in the same comparable period.
The government expects corn output to drop by 17% to 4.64 million tonnes in the first nine months of the year.