Production:

With just one local soybean crush facility, local SBM production remains insignificant relative to overall Philippine oil-meal production. SBM output in MY 13/14 was pared down due to the reduced crush for the year. Soybean crush demand and SBM production are expected to remain flat through MY 15/16.

Copra meal is a by-product of the CNO extraction process, and downward revisions were made to copra crush in MY 13/14 as a result of similar revision made to copra output during the year. Copra meal production is expected to decline modestly in MY 14/15 and then slightly increase in MY 15/16, reflecting copra yields during the period.

Consumption:

The local hog industry is the dominant Philippine feed consuming sector, accounting for an estimated 55-65 percent share of the country's feed requirements. Poultry production accounts for 25-35 percent and aquaculture covers roughly 10 percent.

The hog industry continues to undergo a period of consolidation. While large farms (that enjoy greater economies of scale) continue to grow and are coping with increased production costs, small backyard raisers (which still account for the majority of the hog industry) are struggling to remain salient. The overall hog population is likely to remain relatively flat during this consolidation phase. However, because the larger farms are increasingly employing more sophisticated and scientific raising methods (e.g., modern animal health and nutrition technology), the demand for high quality feed ingredients is likely to remain strong and increase, according to trade contacts.

Similarly, the Philippine feed industry is also transitioning to more sophisticated operations. Traditionally dominated by home-mixers, the industry now is being driven by local commercial millers and integrated producers. Alongside this new trend are multiple reports from industry contacts of increased investments in the feed grain delivery and distribution chain, specifically in the storage, handling and marketing infrastructure system.

As mentioned in previous annual reports, copra meal is not a protein substitute for SBM and is used primarily as feed 'filler'. Copra meal demand was pared down in MY 13/14 to reflect declining copra crush during the period. Demand is likely to decline anew in MY 14/15 from the previous year's level but is expected to increase modestly in MY 15/16 as copra output slightly improves.

For SBM, consumption was revised downwards in MY 14/15 to reflect a slightly slower growth rate in feed demand, but is still expected to increase from the MY 13/14 level. MY 15/16 SBM consumption is expected to modestly surpass the previous year's level as the livestock and feed industries continue to grow.

Trade:

SBM imports in MY 13/14 were raised to 2.41 MMT, in-line with local industry and trade association approximations that prevalent lower global prices caused a moderate build-up in stocks. Post estimates MY 14/15 SBM imports will remain at the previous year's level as the build-up in carry-over stocks will offset steadily growing feed demand. SBM imports are forecast to reach 2.5 MMT in MY 15/16, driven by continued consolidation and growing sophistication of the domestic feed-consuming industries, and significant industry investment in feed grain distribution infrastructure.

The following are copra meal exports for the CY 2012-2014 period. Copra meal exports declined 38% from 892,000 MT in CY 2013 to 551,000 MT in CY 2014. The majority of copra meal exports were destined for South Korea (48 percent) followed by China (19 percent).

Philippines Export Statistics

Commodity: 230650, Coconut Or Copra Oilcake And Other Solid Residues Resulting From The Extraction Of Coconut Or Copra Oil, Whether Or Not Ground Or In Pellets

Annual Series: 2012 - 2014

Quantity

Partner Country

Unit

2012

2013

2014

World

T

654012

892281

551198

Korea South

T

340333

358744

264103

China

T

42958

137341

102693

Vietnam

T

167710

185208

96974

Taiwan

T

19844

19572

25648

India

T

18801

6338

20650

Japan

T

18109

25730

12168

Singapore

T

1416

1485

9600

Italy

T

0

8500

8000

Hong Kong

T

624

17852

5097

United States

T

0

61930

3000

Malaysia

T

1361

27067

1211

Netherlands

T

7500

26535

1000

New Zealand

T

0

1698

802

Others

T

35357

14280

252

Source: Global Trade Atlas/Exporter Statistics

On a market year basis, copra meal exports reached 554,000 MT in MY 13/14, according to GTA exporter data. Copra meal exports in MY 14/15 are likely to moderately decline to roughly 500,000 MT and remain at this level in MY 15/16, reflecting the overall copra supply.

Philippine imports of distillers dried grains with solubles (DDGS) are provided in the following table. DDGS imports increased 70 percent from 73,200 MT in 2013 to over 124,000 MT in 2014 with the U.S. market share increasing from 84 percent to 93 percent during the period. Industry contacts report that there is growing interest in the use of DDGS in hog rations by local raisers.

Reporting Countries Export Statistics (Partner Country: Philippines)

Commodity: 230330, Brewing Or Distilling Dregs And Waste, Whether Or Not In The Form Of Pellets

Annual Series: 2012 - 2014

Quantity

Reporting Country

Unit

2012

2013

2014

Reporting Total

T

196485

73231

124725

United States

T

163794

61581

116551

Taiwan

T

31500

11000

7700

Japan

T

546

649

468

United Kingdom

T

0

1

2

Singapore

T

0

0

4

Australia

T

645

0

0

Canada

T

0

0

0

China

T

0

0

0

Source: Global Trade Atlas/Exporter Statistics

Stocks:

SBM stocks were raised in MY 13/14 due to higher-than-expected imports for the year due to prevalent low prices. MY 14/15 ending stocks are expected to slightly decline as a result of the anticipated spike in feed demand connected to 2016 election-related spending. MY 15/16 ending stocks are expected to remain at roughly the same level as the previous year.

Copra meal stocks were pared down in MY 14/15 and are likely to stay at this level in MY 15/16 due to tightness in overall copra supply.

Policy:

Copra meal imports (HS Code 2306.50.00) will continue to be levied a 10% MFN import tariff for the period 2011-2015, according to EO 61. EO 61 reduced import tariffs for SBM (HS Code 23.04) from 3% to 1% through CY 2015. However, like soybeans, SBM imports are duty-free under the Agricultural and Fisheries Modernization Act provided they are inspected and certified by the Philippine Bureau of Plant Industry and the Bureau of Customs. Under the AFTA, copra meal and SBM imports are duty-free.

Production, Supply and Demand Data Statistics:

Meal, Soybean

2013/2014

2014/2015

2015/2016

Market Begin Year

Jan 2014

Jan 2015

Jan 2016

Philippines

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

120

85

135

85

0

85

Extr. Rate, 999.9999

1

1

1

1

0

1

Beginning Stocks

135

135

216

262

0

239

Production

94

67

106

67

0

67

MY Imports

2,337

2,410

2,500

2,410

0

2,500

MY Imp. from U.S.

1,107

1,107

1,150

1,107

0

1,107

MY Imp. from EU

0

0

0

0

0

0

Total Supply

2,566

2,612

2,822

2,739

0

2,806

MY Exports

0

0

0

0

0

0

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

2,350

2,350

2,650

2,500

0

2,550

Total Dom. Cons.

2,350

2,350

2,650

2,500

0

2,550

Ending Stocks

216

262

172

239

0

256

Total Distribution

2,566

2,612

2,822

2,739

0

2,806

1000 MT, PERCENT

Meal, Copra

2013/2014

2014/2015

2015/2016

Market Begin Year

Oct 2013

Oct 2014

Oct 2015

Philippines

USDA Official

New post

USDA Official

New post

USDA Official

New post

Crush

2,475

2,355

2,425

2,310

0

2,375

Beginning Stocks

50

50

31

31

0

21

Production

810

775

795

760

0

780

MY Imports

0

0

0

0

0

0

MY Imp. from U.S.

0

0

0

0

0

0

MY Imp. from EU

0

0

0

0

0

0

Total Supply

860

825

826

791

0

801

MY Exports

554

554

475

500

0

500

MY Exp. to EU

0

0

0

0

0

0

Industrial Dom. Cons.

0

0

0

0

0

0

Food Use Dom. Cons.

0

0

0

0

0

0

Feed Waste Dom. Cons.

275

240

325

270

0

280

Total Dom. Cons.

275

240

325

270

0

280

Ending Stocks

31

31

26

21

0

21

Total Distribution

860

825

826

791

0

801

1000 MT, PERCENT