Alcala dismisses allegations of corn hoarding

MANILA, Philippines - Department of Agriculture Secretary Proceso Alcala has dismissed allegations of corn hoarding, saying higher farmgate prices are following the pricing trends in the world market.

Because of the prevailing drought in the United States, corn prices in the world market have been pushed to P18 per kilogram (kg), causing domestic farmgate prices to rise to P15- P16 per kg from P12-P13 per kg early this year.

The DA’s field office in Cagayan Valley earlier reported that corn traders in the region have been receiving offers of P13.60 per kg from buyers so they are holding on to their grain stocks as they wait for higher buying prices to offset their expenditure.

“Prices are higher in the international market so how can you say there is hoarding? Before, during harvest, corn was bought from farmers at P10 to P12 per kilo. This is the chance of farmers to earn more,” Alcala said.

The agriculture chief said that because of better corn prices, more farmers were encouraged to replant in September, which will be due for harvest by January.

“If farmers did not replant, corn prices may reach P22 per kilo. Because farmers were able to sell at P15 per kilo, that’s very good for them so now they replanted. By the first semester of next year, we will have a harvest,” said Alcala.

The DA’s National Corn Program is keeping its production target of 7.8 million metric tons (MT) for 2012 — from last year’s output of 6.97 million MT — at a sufficiency level of 98 percent.

Corn production for the second semester is expected to reach 3.99 million MT based on third quarter standing crop and planting intentions of farmers in the fourth quarter.

An abundant harvest in January, however, would guarantee lower corn prices in the country.

“It will still depend on prices in the international market. If it rises to P25 per kilo, for instance, how can you sell it for P14 to P15 per kilo? The domestic market will of course follow the trend,” said Alcala.

For now, the odds are in favor of local corn farmers as international corn prices are expected to remain high.

Alcala noted that the prevailing drought in the US has prevented corn farmers from replanting in October. Now that the winter season is approaching, they will have no fresh harvest by the first semester of 2013.

International prices of feedwheat, an additive in animal feeds, also remain high.

As it is, even if local corn traders seek tariff-free importation of corn, they will have to do so at high prices.