As prices for local and imported feed corn hit record highs, the Philippine Association of Feed Millers Inc. (Pafmi) urged the government to review the tariff structure on yellow corn to avoid a larger increase in the cost of production of meat and poultry products. .
In a statement, Pafmi pointed out that the increase in the prices of local and imported feed maize triggers an escalation in the price of feed and the cost of producing meat, poultry products and fish, which should ultimately be passed on to end consumers.
“The tariffs are supposed to protect local corn growers, but with the large supply shortfall, millers have to import more corn to be able to meet the needs of cattle ranchers. The country’s import of yellow maize is now greater than what is available locally, and has a greater impact on consumer foods, ”said Pafmi.
With the current tariff structure, corn imported from non-ASEAN (Association of Southeast Asian Nations) countries inflates the Philippines’ import costs to unrealistic levels, Pafmi said, noting that this situation is further exacerbated by the current tight demand for corn in the world market which has driven up prices.
Currently, the country applies tariffs of 5 percent on maize for those from ASEAN member countries, with 35 percent for supply falling under the country’s minimum access volume commitment ( MAV) under the World Trade Organization and 50 percent for imports above the MAV.
At a tariff of 50 percent, imports of feed corn could result in landed costs as high as 30.10 pesos per kilo.
If local corn were available, the price today would only be P21 to P23 per kilo. Last year, before this global corn supply and price crisis hit, local corn averaged just 15.79 pesos per kilo.
Pafmi said the current scarcity of maize allocated for export by ASEAN members as well as the overall high prices are expected to last until 2022, closely monitoring grain supply and movement between countries. .
At the same time, other ASEAN members have already submitted a revision of their tariffs on corn to support their livestock industry, not only to ensure the stability of consumer prices of pork products and poultry, but also to support their livestock export industries.
“Local millers want the country to adopt similar measures and protect Filipino consumers and domestic corn-dependent industries from the negative impact of rising corn prices on the world market,” Pafmi said.
The association further stated that “the Philippines cannot rely solely on supplies from its counterparts in Asean as they are also heavy users of maize.”
Currently, yellow corn accounts for 40 to 60 percent of feed formulation, while animal feed accounts for 60 to 70 percent of the cost of producing meat and poultry products.
According to Pafmi’s calculations, an increase P1 in the price of feed corn per kilo would result in a 3% increase in the cost of producing one kilo of broiler feed, which in turn could lead to an increase in 1% of the cost of growing a broiler chicken. A 3% increase in the cost of producing one kilogram of feed for laying hens could increase the cost of producing an egg by 2%, and a 2% increase in the cost of producing a kilogram of feed. for pigs could increase the cost of raising a pig by 2%. All of this will lead to higher prices for pork, chicken and eggs, according to Pafmi.
Pafmi calls for a long-term solution government that paves the way for a reliable and consistent local corn supply. “The yellow maize value chain could be a major contributor to the country’s economy, while providing maize farmers with better incomes,” he concluded. EIREENE JAIREE GOMEZ