According to GPH data, Philippine corn output increased five percent from 7.4 million tons in in CY2013 to a record 7.8 million tons in CY2014. On a MY basis, corn output are forecast to continue to modestly increase through MY15/16, enhanced by continued GPH agricultural sector investment and utilization of higher quality seed varieties (including biotech seed varieties for corn).

Under the Association of South East Asian Nations (ASEAN) Trade in Goods Agreement (ATIGA), corn imports have a five percent duty through CY2015. The World Trade Organization's (WTO) Most Favored Nation (MFN) tariff rate for corn is 35 percent for the in-quota limit of 217,000 tons while the out-of-quota rate is 50 percent, through CY2015.

Despite strong demand from the consolidating hog industry and the growing broiler and layer operations, corn imports are forecast to significantly decline in MY15/16 due to rising local production and the expected adequate carryover stocks from MY14/15.

Corn

2013/2014

2014/2015

2015/2016

Market Begin Year

Jul 2013

Jul 2014

Jul 2015

Philippines

USDA Official

New post

USDA Official

New post

USDA Official

New post

Area Harvested

2,584

2,584

2,625

2,639

0

2,725

Beginning Stocks

576

576

833

833

0

949

Production

7,532

7,532

7,900

7,981

0

8,275

MY Imports

725

725

600

735

0

450

TY Imports

750

750

600

660

0

500

TY Imp. from U.S.

56

56

0

0

0

0

Total Supply

8,833

8,833

9,333

9,549

0

9,674

MY Exports

0

0

100

0

0

0

TY Exports

0

0

100

0

0

0

Feed and Residual

5,900

5,900

6,200

6,350

0

6,450

FSI Consumption

2,100

2,100

2,200

2,250

0

2,275

Total Consumption

8,000

8,000

8,400

8,600

0

8,725

Ending Stocks

833

833

833

949

0

949

Total Distribution

8,833

8,833

9,333

9,549

0

9,674

1000 HA, 1000 MT, MT/HA

Production:

According to the PSA, corn output in CY2014 reached 7.77 million tons, up 5.3 percent from the 7.38 million tons of output in CY2013. Area harvested in CY2014 increased 1.9 percent to 2.61 million hectares from 2.56 million hectares in CY2013 while yields improved slightly from 2.88 tons per hectare in CY2013 to 2.98 tons per hectare in CY2014. Major corn producing areas in CY2014 included the Cagayan Valley, Western Visayas, the Davao Region, Northern Mindanao, and the Autonomous Region of Muslim Mindanao. Good production in most of these areas was attributed to increased use of better quality seeds. According to a DA contact, roughly 20 percent of overall CY2014 corn areas were planted with traditional (home-saved) seeds, 35 percent to open pollinated varieties, and the balance (45 percent) planted with hybrid and genetically-modified seeds. The PSA notes harvests slightly shifted from the third quarter to the fourth quarter due to delayed plantings, particularly in the northern part of Luzon.

For the first semester of CY2015, the PSA projects corn output will increase 6 percent to 3.7 million tons compared to the 3.5 million tons during the first semester of the previous year. The PSA attributes the increase to a wider area harvested, as well as better yields. Corn output and area harvested in MY14/15 were raised as a result, and Post expects this trend to continue in MY15/16

In CY2014, the average ex-farm price of yellow corn was P12.77 ($0.28) per kilo, slightly higher than the CY2013 and CY2012 average prices of P11.62 and P12.43 per kilo, respectively. The average ex-farm price of white corn was P13.95 ($0.31) per kilo in CY2014, three percent higher than the P13.81 price in CY2013.

Consumption:

The following are monthly average wholesale prices of yellow corn for the period CY2011-2014. According to preliminary PSA data, the average yellow corn retail price in CY2014 was at P15.37 ($0.34) per kilo, slightly lower than the P15.93 ($0.35) per kilo average price in CY2013.

According to industry, corn is the preferred feedgrain by local end-users. However, only an estimated 15 percent of the domestic corn harvest is dried appropriately for feed use. Local industry contacts report that, as a result, Philippine feed millers prefer imported corn grain to avoid aflatoxin contamination issues.

Feedcorn consumption was raised in MY14/15 due to strong demand by the domestic livestock and poultry industries and is predicted to continue increasing through MY15/16. Also, election-related spending leading to the May 2016 Presidential elections is likely to result in a spike in feed consumption in the next two years.

White corn is a staple in some parts of the Visayas region and Mindanao, and is consumed as grits mixed with rice. The average CY2014 retail price of local white corn was P21.82 ($0.48) per kilo, slightly higher compared to the P18.97 ($0.42) per kilo average price in CY2013. Food corn consumption was raised in MY14/15 due to the increasing needs of the growing population and is expected to continue growing in MY15/16.

Trade:

According to GTA data, corn imports in CY2014 grew 87 percent from 392,419 tons in CY2013 to 732,471 tons in CY2014, the majority (65 percent) originating from Thailand. Argentine corn comprised 38 percent of CY2014 imports and was the second largest source followed by the U.S. which accounted for 9 percent.

Reporting Countries Export Statistics (Partner Country: Philippines)

UDG: Coarse Grains, Group 59 (2012)

Annual Series: 2012 - 2014

Quantity

Reporting Country

Unit

2012

2013

2014

Reporting Total

T

178526

392419

732471

Thailand

T

90055

321245

475338

Argentina

T

5066

2704

180776

United States (Consumption/Domestic)

T

24260

19950

68990

Australia

T

10946

12462

7150

China

T

1336

1844

186

South Korea

T

10

17

20

New Zealand

T

5

1

11

Canada

T

52

238

0

Ukraine

T

396

1920

Others

T

46402

32035

0

On a market year basis, corn imports in MY and TY14/15 were raised based on extrapolated GTA data from the July-December 2014 period. Corn imports are likely to decline from 735,000 tons in MY14/15 to 450,000 tons in MY15/16 as a result of ample stocks.

Corn imports into the Philippines have a two-tiered MFN tariff structure: 35 percent in-quota duty and a 50 percent out-of-quota rate. For CY2015, the in-quota or Minimum Access Volume (MAV) for corn is 217,000 tons, unchanged from the CY2014 level. Corn imports originating from member countries of ASEAN are charged a much lower 5 percent duty through CY2015 under the ATIGA.

Forecasted corn exports were removed in MY14/15 as approval from the GPH for local corn farmers to export is not expected to happen.

Stocks:

Corns stocks in MY14/15 were raised due to upward adjustments made to production and imports, and are likely to stay at this level in MY15/16. The majority of corn stocks are with private traders and large feedmillers.

Policy:

Next to rice, corn is the second most important crop in the Philippines. As mentioned in the previous annual, local corn farmers have been petitioning the GPH to allow them to export corn. Corn exportation is allowed only when the GPH declares there is a surplus. To date, there has been no declaration, and industry contacts do not expect it will materialize in the near term.