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Feed millers eye zero tariff on corn substitutes

Feed millers have sought duty-free importation of soy bean, soy bean meal, tapioca and dried distillers grains as possible corn substitute to keep the industry afloat amid the high cost of feeds.

“Since we’re not allowed to import duty-free under the Agriculture and Fisheries Modernization Act [Afma] like some sectors, we are banking on the word of Secretary [Arthur] Yap that he will help the feed milling sector procure the necessary raw materials for our operations,” an industry source said.

Philippine Association of Feedmillers Inc. wrote a letter to Yap on Jan. 31 asking for zero tariff importation of corn substitutes to lower the cost of producing feeds.

The source said the association would send a similar letter to director Mariz Agbon, who is in charge of tariff matters at the National Economic and Development Authority.

The industry, meanwhile, has not decided if it will seek zero duty corn importation.

“We’re still playing by the ear. It seems that there is significant volume but we are yet to see that. Meanwhile, we want to reduce our production cost and we anticipate a positive response to our request,” the source said.

The Philippines last year imported 120,000 tons of corn against an output of 6.79 million tons.

Corn production this year is projected to reach 7.37 million metric tons, up 8.5 percent in 2007.

Agriculture Assistant Secretary and concurrent director of the GMA-Corn Program Dennis Araullo earlier said the higher corn production would come from the expansion of areas planted to the crop.

Areas identified for corn expansion include Sultan Kudarat, Maguindanao and other parts of Mindanao.

Araullo said areas planted to corn would expand by an additional 75,000 hectares.

Local corn now is at P13 per kilogram against imported corn at P15 to P16/kg, landed.

Araullo said there could be slight shortfall in corn supply this year despite a robust harvest last year.

Tags · Tariffs · Phillipines

12.02.2008. 07:02