Local feed millers are asking the Department of Agriculture (DA) to look into the alleged hoarding of corn by traders to manipulate prices amid a reported corn surplus.
“Despite repeated claims by the DA-National Corn Program that there is more than enough supply of corn, prices remained high over the past months, forcing us to source our grains from abroad,” a high-ranking industry official said.
“We are having a hard time buying corn at lower prices, while in some cases, there’s limited or no stocks available from these traders. They should definitely check their figures,” the source added.
Based on the report of the Philippine Statistics Authority-Bureau of Agricultural Statistics, corn production reached 3.48 million metric tons from January to June 2014, up 4.7 percent from the 3.32 million MT output last year.
For July-September 2014, the forecast on standing crop indicates a lower output by 7.8 percent to 2.4 million MT from 2.6 million; while the October-December 2014 forecast indicaes production may increase by 18.9 percent.
But despite another record production of corn, prices in Isabela Province ranged from P15.00-P16.50 per kilo and were being sold in Bulacan at a landed price of P17-P18 per kilo.
“Compared with the landed cost for imported corn, the prices these traders are offering are definitely higher,” the source said, noting that US and Argentine corn average only P12 per kilo.
To drive down prices of local corn, feed millers are looking at importing some 1.2 million MT of feedwheat this year, with additional volumes to spill over by the first quarter of 2015.
“Until the first quarter of next year, feed millers may again look to overseas suppliers for feedwheat, even for corn and soya bean, because of high prices of the local corn. We are allowed to import as much as we need, as long as prices of the local corn are not competitive,” the source said.
“We want to help the local corn growers, but some unscrupulous traders are persistent to hike prices,” the source added.
As of October 2014, some 800,000 MT of feedwheat have arrived in the country as feed millers take advantage of lower prices of Black Sea and Australian wheat.
At present, the landed cost of feedwheat averages P13 per kilo. Feedwheat is an alternative ingredient used for making animal feeds. The typical animal feed used by local hog growers is composed of 50 percent corn, 25 percent soya meal from soybean, and 25 percent polard, plus multivitamins, fish meal and coconut oil.
Meanwhile, the country’s biggest feed millers have started applying for corn importation under the minimum access volume to take advantage of the bumper harvest in the United States and Argentina.
“Other big players are also looking at Thailand for additional corn imports. Despite limited volume, Thailand is an ideal source of corn since they offered about $290 per MT at only 5 percent tariff,” the official added.