DA says no to duty-free corn importation by private sector

The Department of Agriculture (DA) is not allowing the private sector to import corn duty-free.

Agriculture Secretary Domingo F. Panganiban reports the department granted requests from the feed millers and traders to bring in corn at zero tariff.

"We are not allowing and there isn’t even any plan of allowing traders to bring in imported corn at zero-duty. There isn’t even a pending request. First if there is one, we will need to get the approval of the President, secondly and it is quite obvious the Secretary Gary Teves will not allow it," Panganiban said in a press briefing.

Panganiban noted that currently, what the DA allows is the importation of corn under the minimum access volume (MAV) which has been reduced to 35 percent from 40 percent.

MAV refers to the minimum volume of a commodity committed by member countries of the World Trade Organization that they are obligated to allow entry into their markets at preferential tariffs.

Corn allocation for the private sector under MAV is about 217,000 metric tons for the year while the government through the National Food Authority (NFA) has been given the authority to import up to 2,000 metric tons of corn for 2006.

The inter-agency on rice and corn of the DA determines the specific MAV allocation for any given year.

The DA said there is no basis for news reports and columns alleging the department acceded to requests of feed millers and traders to bring in corn at zero tariff, and subsequently, bringing down local corn prices.

Corn price at the domestic front went down by P0.50 to P10.30 to P10.50 for the year, as corn harvest from Mindoro are now en route to Luzon and Manila via Batangas Bay. Corn from General Santos City and Cagayan de Oro are higher at P10.50 to P11 per kilo due to higher transport costs.

Last week, the private sector placed an order of about 24,050 metric tons (MT) of Chinese corn at $139.44 per MT C&F.

The Philippine Association of Feed Millers Inc. (PAFMI) bought Tuesday last week corn from China through the international trading house Bunge. The commodity is due to arrive not later than Feb. 15.

Local feed millers said earlier they prefer to import corn because of unstable supply in the local market which results in erratic pricing, along with the poor quality of domestically-produced corn.

Agriculture Undersecretary Segfredo Serrano said local corn farmers should not fear competition from corn imports.

"With regards to our farmers, there is no longer competition here. It is now a matter of supply. If our supply is not sufficient to meet the feed mill sector, they have to bring it in, or else livestock production will be affected," he said.

The private sector wants to import 150,000 MT of corn and so far, brought in 24,050 MT of corn imports and 60,000 to 70,000 of corn substitutes like feed wheat.

Last year, corn production was down by 2.95 percent, in sharp contrast to the 17.28-percent growth in 2004.