Roderico R. Bioco, president of the Philippine Maize Inc. (Philmaize) said the plan to export corn is meant to prevent local corn prices from drastically going down when the August-September harvests will flood the local market with excess supply.
"The plan to export should be considered a safety net for farrners. That way, they will still get a fair price even as limited storage space will drive prices down which we cannot allow while world market prices are very high. Production is expected to increase significantly, especially in Mindanao," Bioco said, adding that surplus production is estimated at 200,000 to 300,000 MT.
Bioco explained that farmers do not have adequate postharvest facilities like the feedmillers and other end-users to be able to absorb and stockpile excess production and effectively control corn prices.
"The planned corn exports will serve as a hedge for farmers so that prices do not go down so much when the harvest season comes," Bioco added.
Current corn prices range from P8.50 to P9.50 per kilo but the rate can go down to P8 per kilo come the harvest season.
"As much as possible we do not want to see local corn prices going down below P8.50 per kilo which is why we are trying to firm up exports to Korea and Malaysia even at very limited volumes," Bioco said.
He said end-users such as feedmillers and the big poultry and livestock integrators are trying to store corn while they can because domestic prices are cheaper compared to the corn that was allowed to be shipped into the country.
Prices of corn in the US and Argentina range from $180 to $185 per MT, and this translates to a landed price of about P12 per kilo in Manila.
In Asia, Bioco said corn from India will amount to P11.75 per kilo while corn from China will have a landed price of P11 per kilo. Thailand is the cheapest at P10 per kilo.
The anticipated excess corn production is not only in Mindanao but also in Luzon. Farmers shifted to corn or expanded their corn area in November last year as prices rose in the wake of three major typhoons that devastated wide swaths of corn plantations.
In the first quarter this year, corn production went up 12.8 percent to 1.526 million MT. The uptrend is expected to be sustained throughout the year barring major natural calamities.