MANILA, Philippines – Despite the ongoing drought in the United States which has pushed up prices of corn and wheat in the world market, the National Food Authority (NFA) does not expect a drastic rise in food prices similar to what happened during the 2008 food crisis, but said measures should be put in place to insulate local consumers from rise in the prices of basic commodities.
NFA administrator Lito Banayo advises local flour millers and feed millers to have ample stock of corn and feedwheat to prevent rise in livestock prices which would reflect in the prices of pork and beef.
“The impact next year would be higher cost of feeds which would increase livestock prices. I hope local flour and feed mills have ample stock of corn and feedwheat to cushion their costs,” he said.
Rise in wheat prices would also mean higher bread prices which would lead consumers to buy more rice. This puts pressure on the government to meet its rice production target for 2012.
For this year, the government targets to produce 18.46 million metric tons (MT) of palay this year, higher than the16.684 million MT produced in 2011.
“Depending on our forthcoming harvests, our rice stock may be affected which could impact on prices next year. If El Niño is severe, summer harvests next year could be less than production targets. I don’t expect a repeat of the 2008 price crisis though,” said Banayo.
Agriculture assistant secretary and national rice program coordinator Dante Delima said palay output growth in the third quarter is expected to be at five percent, lower than the 10-percent projection of the Bureau of Agricultural Statistics (BAS) because of the successive weather disturbances that occurred in July and August, but is expected to rise in the fourth quarter because of the third cropping scheme that would be carried out this month.
Delima said that to recover the damage, some 75,000 hectares in irrigated areas are being identified for third cropping this month. If this is pursued, farmers would be able to harvest by December.
The weather bureau earlier warned of the possible occurence of El Niño in the last quarter of the year but Agriculture Secretary Proceso Alcala said this should not be a cause of concern because the department was already able to add irrigation systems this year for the early cropping scheme that was carried out during summer.
Corn prices in the country remain stable with the expected abundant harvest this year. Alcala said earlier that the Department of Agriculture is encouraging feedmillers and livestock raisers to take advantage of lower corn prices to offset rising prices in the international market.
This would also encourage corn farmers to keep cultivating the crop.
“We expect a good corn harvest this year,” said Alcala, “so we are encouraging local consumption so that the farmers will be encouraged to plant.”
The US drought, the worst in 56 years, is expected to prevent US farmers from replanting by October before the start of the winter season. Therefore, grain prices are expected to remain high.
This phenomenon is also causing the Philippine government to consider the exportation of corn even in a small volume as early this year to take advantage of high prices in the world market.
The NFA, however, is yet to determine the applicable volume for possible exportation.
For 2012, the government expects to attain a corn sufficiency level of 98 percent with a deficit of 179,000 metric tons (MT).
For 2013, the government intends to raise corn yield to 8.4 MMT. By next year, the government aims to attain a sufficiency level of 101 percent with a surplus of 149,000 MT.
Under existing NFA regulations, farmers and traders may obtain transport permits for locally produced corn only for “market testing and experimentation.”
The resolution states that farmers and traders may export a maximum of 100 MT of corn “at any given time.”
Agriculture assistant secretary and national corn program coordinator Edilberto de Luna earlier said that corn exporters are now negotiating with Taiwan and Korea for exports.