High wheat flour prices seen until Q3
Published Apr 25, 2023 08:01 am
Pilmico Foods Corp., one of the country’s most integrated food producers, said that wheat flour prices are expected to remain high until the third quarter of this year as the recent decline in wheat prices in the international market could possibly be reflected in the local market by then.
Tristan Aboitiz, COO for Animal Feeds at Pilmico, said during the Aboitiz Group online press briefing Monday, April 24, said that prices of wheat have come off only in the last few months after steep surges during the pandemic period. Given the lag time in importation and other factors affecting prices, Aboitiz said that wheat prices would still “remain high maybe until the third quarter of this year.” This is to consider the steep increases last year and the depreciation of the local peso against the US dollar, he said. But Aboitiz said he is looking forward to good harvest season in wheat producing countries in Europe, North America and the Black Sea and then Australia later in the year. He expressed hope for good crops coming off from those major wheat production areas would be able to result in lower prices despite the fact that their balance sheets still remain tight. In case harvest from production areas falter, he said, “There is definitely room for prices to move back up again.” For now, he said, they remain hopeful that prices will continue to remain low to afford them and those in the feedmilling industry as well to “pass on those decreases down into our customers.” It should be noted that bread makers still have pending petition with the Department of Trade and Industry for increase in basic bread prices. Meantime, Aboitiz said that its investment to expand in feed milling capacity across the region continues. The two kinds of big-ticket items it is working on are new feed mills in Hunan, China, which is a 150,000- metric ton per annum livestock feed mill with the potential to expand capacity up to 270,000 metric tons. The other feedmill expansion is in Vietnam, which is a 200,000 metric ton per annum feedmill plant with the potential to expand capacity up to 300,000 metric tons. “Both were on track as far as the construction of most mills are concerned,” he said. Its feedmill in Vietnam is expected to be completed by December of this year, while the one in Hunan China is expected to be completed by April of 2024. The mill in Vietnam has an investment of about $27 million and the one in China is about $24 million. On the hog industry outlook given the continuing spread of the ASF (African Swine Fever), Aboitiz said that it is likely to remain challenging. “You know as ASF continues to pose a threat to production and seems to have spread across different islands in the besides over the past few months,” he said. He said that its newest breeder farm, breeder nursery farming in Nueva Ecija was completed in October last year. With the country faces low production of locally produced pork, the new facility can help augment supply as it has a capacity of about 2,500 sows or annual pork supply of 4.7 million kilos. This new farm also brings its feeder farm capacity back up to around 8,500 sows so we complete that loading of animals onto the site in January of this year. In addition, the company has successfully bred about 1,600 or 2,500 animals that are off site. Supply from this farm is expected to be available in the market by the second quarter of this year and is expected to boost its retail brand.
Tristan Aboitiz, COO for Animal Feeds at Pilmico, said during the Aboitiz Group online press briefing Monday, April 24, said that prices of wheat have come off only in the last few months after steep surges during the pandemic period. Given the lag time in importation and other factors affecting prices, Aboitiz said that wheat prices would still “remain high maybe until the third quarter of this year.” This is to consider the steep increases last year and the depreciation of the local peso against the US dollar, he said. But Aboitiz said he is looking forward to good harvest season in wheat producing countries in Europe, North America and the Black Sea and then Australia later in the year. He expressed hope for good crops coming off from those major wheat production areas would be able to result in lower prices despite the fact that their balance sheets still remain tight. In case harvest from production areas falter, he said, “There is definitely room for prices to move back up again.” For now, he said, they remain hopeful that prices will continue to remain low to afford them and those in the feedmilling industry as well to “pass on those decreases down into our customers.” It should be noted that bread makers still have pending petition with the Department of Trade and Industry for increase in basic bread prices. Meantime, Aboitiz said that its investment to expand in feed milling capacity across the region continues. The two kinds of big-ticket items it is working on are new feed mills in Hunan, China, which is a 150,000- metric ton per annum livestock feed mill with the potential to expand capacity up to 270,000 metric tons. The other feedmill expansion is in Vietnam, which is a 200,000 metric ton per annum feedmill plant with the potential to expand capacity up to 300,000 metric tons. “Both were on track as far as the construction of most mills are concerned,” he said. Its feedmill in Vietnam is expected to be completed by December of this year, while the one in Hunan China is expected to be completed by April of 2024. The mill in Vietnam has an investment of about $27 million and the one in China is about $24 million. On the hog industry outlook given the continuing spread of the ASF (African Swine Fever), Aboitiz said that it is likely to remain challenging. “You know as ASF continues to pose a threat to production and seems to have spread across different islands in the besides over the past few months,” he said. He said that its newest breeder farm, breeder nursery farming in Nueva Ecija was completed in October last year. With the country faces low production of locally produced pork, the new facility can help augment supply as it has a capacity of about 2,500 sows or annual pork supply of 4.7 million kilos. This new farm also brings its feeder farm capacity back up to around 8,500 sows so we complete that loading of animals onto the site in January of this year. In addition, the company has successfully bred about 1,600 or 2,500 animals that are off site. Supply from this farm is expected to be available in the market by the second quarter of this year and is expected to boost its retail brand.