Feedmillers plan 40,000-MT feedwheat imports before yearend

MANILA, Philippines - Local feedmillers plan to bring in 40,000 metric tons of feedwheat before the year ends in anticipation of higher corn prices next year, sources in the feedmill sector said.

Industry sources revealed that corn prices – both local and imported – remain high and are expected to hover at such levels up to next year.

According to Roger Navarro of the Philippine Maize Federation, local corn prices currently range from P10.50 to P11.50 per kilo while supply is at a surplus. The international price of corn, on the other hand is at $260 per metric ton.

Feedmillers are not importing corn since global prices are not competitive and are thus opting for the cheaper feedwheat or tapioca. Corn, feedwheat and tapioca are a source of protein in feed mixtures, with corn as the primary raw ingredient in animal feeds.

The current local price of feed wheat ranges from P12-P12.50 per kilo, Navarro said.

Feedmillers currently enjoy zero tariff on their feedwheat imports due to the extension of Executive Order 765 which was intended primarily to keep bread prices down late last year when the cost of imported wheat had gone up.

However, while the zero tariff was intended primarily for milling wheat, it also allowed for the same zero tariff importation of industrial-grade feedwheat used by feedmillers, to the detriment of local corn growers.

EO 765 has been extended up to the end of this month through EO 818.

However, a further extension is not likely for next year as the Philippine Association of Flour Millers (PAFMIL) has informed government that it can restore the three-percent duty on milling wheat as prices of imported wheat have gone down.

From a high of P970 per 25-kilogram bag in end-2008, the price of hard flour has gone down to P750 per 25kg. bag and down to P650 per 25kg. bag for soft flour.

Navarro, however, is wary of the new feedwheat importation as it may bring down prices of local corn anew.

“We just wonder if the objective by importing feedwheat is to lower down further the local corn price,” Navarro said.