Feed wheat imports dragging corn prices to the detriment of farmers

Published September 1, 2020, 10:00 PM

by Madelaine B. Miraflor

The Philippine government was told to put a stop in rising feed wheat imports in the country to stop corn prices from falling further to the detriment of Filipino farmers.

In a statement, two agriculture lobby groups have sounded the alarm over the possibility of domestic corn prices to go down further from the already depressed price of P12 per kilogram (/kg) due to feed wheat imports coinciding with the harvest.

These groups are Philippine Maize Federation Inc. (Philmaize) and the Philippine Chamber of Agriculture and Food Inc. (PCAFI), who have denounced the Department of Agriculture’s (DA) Bureau of Plant Industry (DA-BPI) for allowing feed wheat import arrival during this current corn harvest.

To recall, Philippine Association of Feed Millers Inc. (PAFMI) President Nicole Sarmiento-Garcia recently announced that they bought 81,000 metric tons (MT) of feed wheat, a cheaper alternative to corn in feed making, from the Black Sea and Australia.

This feed wheat imports are scheduled to be shipped to the country in two batches, the first of which carrying 37,000 MT from Black Sea will arrive within this month. The second shipment of 44,200 MT from Australia is scheduled to arrive in December.

According to Garcia, feed millers have to import feed wheat due to the high price of local corn, which traders are quoting at P17 to P17.50/kg in Bulacan.

“Feed millers and local hog and poultry raisers find the traders’ price too high considering that ex farm price of yellow corn is only P12.77/kg. Local traders have cornered the local corn supply and pricing it beyond the cost that will enable feed millers and hog and poultry farmers to produce animal feeds at competitive costs,” she said.  

To be specific, corn comprises 60 percent of the ingredients for the production of animal feeds, while the cost of feeds take up 80 percent of the cost of meat and chicken production.

Now, Philmaize and PCAFI are claiming that the aforementioned feed wheat importation by the members of PAFMI is “unfortunately bringing [corn] price further down to P12/kg or below”.
“This is against expected farmgate of say P15 per kilo and above,” they said. 

For his part, Philmaize President Roger V. Navarro said imports of feed wheat accounts for only 1 percent to 2 percent of the country’s corn production, but their effect on pushing down local corn price is significant.

“It becomes worse as the NFA [National Food Authority] no longer supports corn price as it now has a different mandate due to the RTL [Rice Tariffication Law],” Navarro said, referring to the provision of the RTL that the state-run grains agency can no longer buy corn from farmers to regulate its prices.

PCAFI President Danilo Fausto said that even with RTL – which allowed the unlimited importation of the country’s main staple, rice – the government must continue its price support function for corn, the country’s second main staple, especially during the pandemic.

“Government should immediately initiate a program to buy the corn being harvested at a viable price from the farmers for storage as buffer stock to support future demand during the non-harvest season,” said Fausto.

State competition-policing agency Philippine Competition Commission (PCC) has just released a study showing local corn price is significantly adversely affected by feed wheat imports.

“The Philippines imports feed wheat every month and therefore, when local corn harvest coincides with the arrival of feed wheat, the price of local corn is usually depressed,” the PCC study cited.

“This is more pronounced during the third quarter when the Philippines has the big bulk of local harvest and the quality of which is affected by lack of mechanical dryers” it added.