NFA Council to decide on possible corn exports

MANILA, Philippines - The National Food Authority (NFA) Council will deliberate this month on the petition of corn farmers to be allowed to export their produce, said Agriculture Secretary Proceso Alcala.

“This (corn exportation policy) will be tackled in the NFA Council meetings this month. This will be among the agenda in the regular meeting,” he said in a recent interview.

The NFA Council is chaired by the Agriculture secretary and co-chaired by the NFA administrator. Sitting as members are the secretaries of Trade, Finance, a representative from the Office of the President, the presidents of Philippine National Bank, Land Bank, Development Bank of the Philippines, the governor of the Bangko Sentral ng Pilipinas, and a farmer sector representative.

Corn farmers have been asking the government to be allowed to export their produce to take advantage of high prices in the international market.

The government, however, wants to wait until there is a surplus before allowing exportation to protect local supply and prices.

The Philippines intends to produce 8.4 million MT of corn this year to attain a sufficiency level of 101 percent with a surplus of 140,000 MT.

Corn production in 2012 reached 7.41 million MT for 2012, 6.25 percent higher than the 2011 production level of 6.97 million MT.

Corn producers last year asked the NFA to be allowed to export at least 400,000 MT of yellow corn — which is primarily used as an additive for animal feeds — to take advantage of high prices after the drought that devastated corn crops in the United States.

Under existing regulations, corn producers are only allowed to export as much as 100 metric tons for market testing and experimentation.

The Agriculture department, however, recognizes that there is demand in South Korea and Malaysia that still import 95 percent of their corn requirements from the US.

Local feed millers currently source most of their corn needs locally.

The Philippine Maize Federation Inc. (Philmaize) argues that the Philippines should allow the exportation of corn to fulfill its trade commitments to the World Trade Organization (WTO) and the Asean Free Trade Agreement (AFTA).

“What we want is the need to harmonize our policy towards the issue. While we allow the importation of corn and corn substitute, we should not restrict, but also allow the exportation of corn, not on the basis of surplus but in the spirit of harmonizing WTO-AFTA policy,” said Philmaize president Roger Navarro.

Corn farmers want to be allowed to export to have a leverage when domestic prices fall.

Navarro noted, however, that it would not be profitable for the sector to export now if the government gives the go signal because international prices are falling.

“Unfortunately, even if the government allows us to export today, the international price of corn is not attractive. We can only export if the international market price is good. So the policy should be in place and not conditional. The private sector should be liberated,” he said.

He noted that world corn prices now range from $240 to $260 per metric ton compared to around $380 per metric tons at the peak of the US drought.

World corn prices are falling on improving supply in the US, the world’s biggest corn producer.

In May, the  Philippines sent an initial shipment of 24 metric tons of corn silage for cattle to South Korea.

The shipment bound for Busan, South Korea is part of the 15,000 MT of corn feed and grains worth P75 million that will be exported to South Korea until December 2013.

Corn farmers are not contented with this because silage is considered a low-quality feed that can only be used for cattle.