Corn imports won’t hurt local farmers

The importation of 350,000 metric tons (MT) of corn is not likely to hurt Filipino farmers as imports, even if brought in duty-free, will be more expensive than locally produced corn.

This was the observation of Rod Bioco, president of the Philippine Maize Federation Inc. (Philmaize) who reported that end users are now scrambling to stock up on the commodity while prices are soft as a result of a bumper crop.

Even at duty-free rates, the landed price of imported corn is estimated to reach P11 per kilo while domestic corn is currently priced at P9.50 to P10 per kilo in Luzon and P10.50 to P11.50 in the South.

According to Bioco, end-users in the Visayas are scouting for more storage space to take advantage of a bumper crop that is expected to result from increased hectarage. Bioco said many farmers shifted to corn when prices began shooting up in the fourth quarter last year.

Corn fields in Luzon are projected to yield 1.1 million MT in the current cropping season while those in Mindanao are expected to add 900,000MT.

"There is enough volume right now and end-users such as feedmillers and the big poultry and livestock integrators are trying to store as much corn while they can because domestic prices are cheaper compared to the corn that will be shipped into the country," said Rod Bioco.

Normally, the announcement of corn importation would have a dampening effect on local corn prices "but not this time because the imports will turn out to be more expensive than those produced domestically," Bioco said, adding that even with a bumper harvest, local corn prices are not expected to skid significantly.

Bioco said the timing of the importation is too late and will come in around May to June when local corn supply is already lean.

"Around that time corn end-users would already have stockpiled a significant volume that they acquired at today’s prices," added Bioco.

Bioco said the major players in the industry such as San Miguel Foods, Swift Foods Inc. and Tyson AgroVentures are already looking for more storage spaces and have rented several warehouses of the government-run National Food Authority in addition to their own silos.

Earlier, the program director of the GMA Corn Program, Artemio Salazar said there may be no need after all to push through with the importation. He said early reports on the ongoing corn harvest in various corn-producing regions in the country indicate that there may be enough volume to fill the requirements of local feedmillers, and livestock producers.

Salazar said that when local corn prices started to soar in the last quarter of 2003 after three supertyphoons ravaged most of the corn crop, a lot of farmers shifted to corn.

Hog raisers said they had been clamoring for a zero-duty importation, saying the entire supply chain is being adversely affected by the crisis brought about by the depopulation of commercial hog raisers and the closure of small backyard raisers.