Philipines - Typhoons and diseases that reduced hog and poultry production slowed down demand for feeds and resulted in decline in food production by around 20 percent to 5.5 million metric tons (MMT).
An industry executive, who asked not to be identified, said that weaker demand for meat and poultry products among Filipino consumers has also discouraged hog and poultry raisers from increasing their production this year.
“One indication of the decline in feed production in 2009 is lower soybean-meal imports. Soybean-meal imports will [settle at] 1.1 MMT, down from 1.5 MMT shipped into the Philippines in 2008,” the source said.
Feed production, the feed milling industry executive noted, has been on the downtrend for the last couple of years due to natural disasters, as well as the diseases that ravaged hog and poultry farms.
“[Recently,] we had [typhoons] Ondoy and Pepeng. Prior to that, an outbreak of varied sicknesses such as hog cholera and swine flu hit most [animal] farms in Luzon,” the source said.
Due to lower demand, feed prices were down by as much as 25 percent this year, the industry executive said.
Soybean meal provides the protein requirement for animal-feeds formula. It is an ingredient that cannot be replaced by any other feed substitute such as feed wheat for corn.
Apart from lower hog and poultry population, feed millers also had to contend with the high cost of corn in the first quarter of 2009, when corn prices shot up to as much as P26 per kilo.
The high prices of corn, said the industry executive, prompted local feed millers to import feed wheat.
“The landed cost of feed-grade wheat was at P8 per kilo. Such was the attractiveness of the price of imported feed wheat over local corn that over 1 MMT of feed wheat arrived in the Philippines from January to December this year,” the source said.
The importation of feed wheat was boosted by Executive Order 765, which allowed duty-free importation of feed-grade wheat and food-grade wheat. The 7-percent tariff on feed-grade wheat was scrapped from January to June this year.
Data released by the private sector showed that contracted feed wheat for 2009 reached 1.1 MMT, a significant jump over imports in 2008 pegged at 112,000 metric tons.