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Manila stops buying feed grains

Published on 28 June, 2009, Last updated at 04:16 GMT

THE Philippines, Southeast Asia’s second-biggest importer of wheat, is unlikely to buy any more feed grains this year after covering a supply shortage with shipments in the first half, an industry executive said.

“We have imported more than enough to meet our shortfall in supply this year,” Butch Umengan, executive director of industry group the National Corn Board, said by telephone.

“The next orders will likely be for January delivery.” The feed grains shortfall was no more than 1 million metric tons this year, he said.

A lack of Philippine purchases may extend a slide in prices of wheat and corn, which are used to make animal feed. Wheat futures have fallen 21 percent from an eight-month high on June 1, while corn is headed for a third weekly drop after reaching a seven-month high on June 3.

“The Philippines is a massive importer,” Peter McGuire, managing director at Commodity Warrants Australia Pty in Sydney, said by telephone.

“It will have some impact, I’m sure.”

July-delivery wheat was little changed at $5.3325 a bushel on the Chicago Board of Trade at 9:44 a.m. Singapore time, down 4 percent this week. Corn for December delivery lost 0.3 percent to $4.005 a bushel, down 4.5 percent this week.

Philippine feed millers and meat producers boosted purchases after the shortage pushed up local prices in December and the government granted an exemption on a wheat import tax.

Millers and hog producers bought 1.1 million tons of feed wheat and 565,000 tons of yellow corn this year, Umengan said. The country didn’t import feed grains in the 18 months through January, he said.

The tax break on feed wheat lapsed June 21 and was unlikely to be extended, Gary Olivar, President Gloria Arroyo’s deputy spokesman for economic affairs, said June 24.

Wheat or corn account for about half of the ingredients in animal feed, while soybean meal makes up 20 to 25 percent.

Philippine feed wheat imports might decline next year as farmers were forecast to boost corn planting, spurred by lower fertilizer prices and the government’s decision to raise the price that the National Food Authority pays them for their crop, Umengan added.

Mrs. Arroyo issued an order in May raising the so-called support price for corn to P13 per kilogram from P11.50, he said.

The National Corn Board, which represents feed millers, meat producers, corn planters and suppliers, would review the domestic supply-and-demand situation in September, when it would also release its import forecasts for next year, Umengan said.


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