Profit margins should increase at Restaurants, lower feed prices being passed to lower meat prices especially Poultry.
Feed millers to stop corn imports on weak demand 05/24/2010 | 05:06 PM
tweetmeme_style = 'compact'; tweetmeme_source = 'gmanewstv'; tweetmeme_url = 'http://www.gmanews.tv/story/191747/feed-millers-to-stop-corn-imports-on-weak-demand'; tweetmeme_service = 'bit.ly'; Share Feed millers are no longer keen on importing corn despite a drop in domestic output, because of weak demand from animal feed suppliers.
“The industry is not keen on bringing in more corn. We’re done importing [for 2010]," said an official of the Philippine Association of Feed Millers Inc. who asked not to be named as he was not authorized to speak on the issue.
Corn imports in 2010 will likely amount to no more than 80,099 metric tons (MT), from 344,945 MT in 2009.
Imported corn from Thailand arrived in batches from January to early May, contracted at $250 per MT or at a landed cost of P13 per kilo. The price is almost on a par with domestically produced corn selling at a farm-gate price of P13.50 per kilo.
The demand by hog and poultry feed suppliers has weakened, forcing many feed millers to pare production and plug their losses, the association official said.
Animal feed production is expected to decline by 10 percent to 4.9 million MT this year.
The association has booked up to 800,000 MT of feed wheat — a cheaper corn substitute — for delivery toward September 2010 to cover for the slack in imported corn. The landed cost of feed wheat is about P11 per kilo or P2 lower than that of corn.
“Should there be a surge in demand [for animal feed] towards year-end we might import additional feed wheat but not corn. We can book [in] November for December arrival," the official said.
This might be the most difficult year for feed millers, “probably because of the climate change factor. Animals are getting stressed. Raisers have started cutting down on volume," he said.
The severe dry spell caused by the El Niño phenomenon has already damaged around 500,000 MT of standing corn crop, according to the Agriculture Department.
Corn production in the first quarter declined by 16.8 percent to 1.6 million MT from 1.94 million MT in the same period last year.
Yellow corn — the main ingredient in animal feeds — went down by 20 percent to 1.15 million MT in the same comparable period.
The government expects corn output to drop by 17 percent to 4.64 million MT in the first nine months of the year. —VS, GMANews.TV