Corn supply shortfall seen this year

The corn supply shortfall this year is expected to reach more than one million metric tons, and users in the animal raising and feedmilling sector are all gearing up for hard times ahead.

The price of yellow corn has already shot up to P10.15 to P10.50 per kilo ex-Manila, as against P6 to P6.50 per kilo last September. And industry sources say there are indications that prices may still go up.

Rene Eleria, president of the Philippine Association of Feed Millers Inc. (PAFMI), said that while corn production increased by 19.92 percent, from 3.82 million tons in 1998 to 4.58 million tons last year, post-harvest losses and farm losses reached more than 30 percent.

An official of Swift Foods, Inc. noted that the agricultural performance report takes into account gross production and does not include losses due to poor storage, which occurs every year.

Eleria, for this part, added that while 30 percent is a good estimate of the losses, last year's loss is much, much more due to the heavy rains.

"There is a shortage of good quality corn. In Isabela, tuloy-tuloy ang ulan at hindi sabay-sabay ang harvest katulad ng dati," Eleria said.

He said that government has already approved a standby authority to increase the minimum access import volume (MAV) for corn from 168,000 metric tons to around 320,000 tons for this year, but this still needs approval from Congress.

The MAV is a commitment made by the Philippine government during the GATT Uruguay Round whereby a certain volume of agricultural products will be imported at concessional tariff rates.

However, Philippine laws require that for the MAV to be increased, the President has to recommend such to Congress for approval.

Eleria said that they expect additional imports of around 300,000 metric tons of corn before the end of the year.

But since the corn supply shortfall is expected to reach more than a million tons, the private sector is expected to fill in the gap through the importation of around 600,000 to 700,000 metric tons of corn substitutes, such as sorghum.

Already, a hograisers' group is importing a minimum of 10,000 metric tons of sorghum a month.

Since approval by Congress of a MAV increase for corn is expected to be long and tedious, Eleria recommended that the National Food Authority import corn like it did two to three years ago and then sell it to the private sector, with the profit going to a corn development fund.