Rising global prices of corn benefitting local corn sector

MANILA, Philippines - With the global increase in corn prices, the local corn industry is enjoying higher prices, according to a price monitoring of the Department of Agriculture’s Bureau of Agricultural Statistics (DA-BAS).

Based on preliminary data as of March this year, the BAS reported that yellow corngrain farmgate price at P12.59 per kilogram was up 10.44 percent from March last year’s P11.40/kg.

White corngrain farmgate price at P14.04/kg rose 2.41 percent compared to the P13.71/kg price last year.

The corngrain price increase was reflected in both wholesale and retail prices of yellow corngrain, but not in white corngrain.

The average wholesale price of yellow corngrain at P15.22/kg as of March 2011 rose 6.28 percent as against the P14.32/kg price last year, while the average retail price of P19.41/kg increased more moderately at 0.47 percent compared to the P19.32/kg last year.

For white corngrain, wholesale prices as of March 2011 at P15.64/kg was down 9.33 percent compared to the prevailing P17.25/kg in March 2010, while average retail price of P18.71/kg in March 2011 was down 14.68 percent compared to P21.93/kg in March last year.

The United States Department of Agriculture (USDA) has reported that US farmers are increasing by five percent their corn plantings following the doubling of corn prices in the last five years and due to dwindling stocks of corn.

Demand for corn, specifically for ethanol production has remained steady, coupled by strong demand from China.

In the Philippines, demand for locally produced corn has spiked as a result of higher global corn prices.

Yellow corngrain, particularly, is used by the Philippine feed industry as its major raw material in the production of animal feeds.

An increase in the price of feedwheat, an alternative raw material to corn, has led local feedmillers to revert back to corn.

Feedwheat prices have spiked due to the destruction of wheat production in the Ukraine, Canada and Australia.