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Philippines: Higher rice, corn imports loom
MANILA, Philippines — The Philippines may import more rice and corn this year due to lower rice production and the extension of lower tariffs, according to the United States Department of Agriculture (USDA).
In a report, the USDA-Foreign Agricultural Service (FAS) raised its rice import forecast for the Philippines to 3.8 million metric tons (MT) this year from the previous target of 3.4 million MT.
The higher forecast was “because of the need to cover for the production shortfall,” it said.
Earlier, the Federation of Free Farmers (FFF) said the country may need to import at least three million MT of rice with a looming shortage due to low production and higher food utilization.
However, the Department of Agriculture (DA) dismissed the looming rice shortage this year.
In its latest report, the USDA said the Philippines’ milled rice production was expected to be lower, down to 11.975 million MT from the earlier forecast of 12.411 million MT for the year.
The USDA cited damage from Super Typhoon Karding in September last year as among the factors for the lower projection.
“Area harvested was lowered to 4.7 million hectares because of the damage brought by Super Typhoon Karding,” it said.
Meanwhile, the diminished fertilizer application will also lower rice yields.
The Philippines’ fertilizer imports saw a decline from April to July, which are “periods when it is most needed for growing crops,” the US agency said.
It also cited the decline in the total nitrogen value of fertilizers imported from July to August by 46 percent.
“Because of this data (and in consultation with industry contacts), FAS Manila believes that there should be contraction of rice production for MY 2022/23 Quarter 1 rather than the one percent increase in the official government data,” the USDA said.
The USDA has also estimated the country’s rice consumption to reach 15.7 million MT next year, higher than its previous forecast of 15.6 million MT.
This is in line with the shifting of demand from high-priced bread to rice, it said.
Ending stocks were lowered further to 4.19 million MT from 4.61 million MT to reflect higher demand.
For corn, the USDA expects the Philippines to import one million MT, up by 300,000 MT from its previous projection.
The increase is attributed to the extension of lower tariffs through 2023, as well as competitive ASEAN corn price quotes.
For the country’s corn production, the US agency maintained its forecast of 7.9 million MT.
“While farmgate prices have become attractive for corn farmers, this was tempered by the high production costs (of which fertilizer is a major factor). As with rice, FAS Manila believes that there is a reduction in corn production (as opposed to Philippine government data),” it said.
The USDA also expects the corn feed consumption to increase by 300,000 MT to 6.9 million MT due to the extension of lower tariffs and competitive future price quotes.
“Corn is still the preferred feed ingredient, especially for broilers and layers when available,” it said.
Last month, President Marcos approved the endorsement by the Board’s Committee on Tariff and Related Matters to extend the low Most Favored Nation (MFN) tariff rates on meat of swine (fresh, chilled, or frozen), maize, rice, and coal under Executive Order (EO) No. 171 for another year.
EO 171 was then signed last May by then president Rodrigo Duterte to bring down prices and stabilize the supply of agricultural products in the country
It extended the 15-percent in-quota and 25-percent out-quota tariff rates for pork were extended until Dec. 31 this year, and will revert back to 30 percent and 40 percent, respectively, by Jan. 1.
It also extended until the end of the year the reduced tariff of 35 percent on imported rice, and will return to 40-percent in-quota and 50-percent out quota tariff rates by January.
The EO also lowered the in-quota tariffs on corn imports to five percent from 35 percent until the end of the year.
With the higher projections for corn, the country is seen to import and consume less wheat this year.
The USDA has estimated wheat imports to reach 5.8 million MT, down 900,000 MT from its previous forecast, because of higher wheat prices and competitive corn quotes.
Feed wheat consumption is also expected to decline, by 200,000 MT to 2.5 million MT because of expectations that some demand will shift to corn, it said.
Source: https://www.philstar.com/business/2023/01/02/2234693/higher-rice-corn-imports-loom