Philippines. Grain and Feed Update. Jul 2014 Aug. 1, 2014
Downward adjustments were made to wheat imports due to a shift away from feedwheat use to yellow corn consumption in MY 2013/14. Although provisional tariffs have been imposed on Turkish flour imports, its effect on trade will be more evident after a final verdict is reached on September 2014. Corn imports were raised as production was pared down in MY 2013/14 to reflect similar adjustments made to area harvested during the year. Rice output was also adjusted downwards in MY 2013/14 even as rice imports were less than expected. Rice prices continue to increase as a result.
MY 2013/14 imports were pared down as a result of the shift by some end users from feed wheat to yellow corn use. The MY 2013/14 import estimate is based on exporter reports to the Global Trade Atlas (GTA) for the July 2013 to April 2014 period, extrapolated for the entire MY 2013/14.
In April 2014, the Philippine Department of Agriculture imposed provisional tariffs (35% tariff on hard flour used for making bread, 39.26% on flour used for biscuit bread, and 35.21% on soft flour used for pastries and cookies) in addition to the current 7% regular import duty on wheat flour from Turkey. The temporary tariffs took effect in May 2014 and the Philippine Tariff Commission is currently determining whether the provisional duties should be made definitive. A decision is expected in September 2014.
Corn production and area harvested were revised downwards based on the January – March 2014 grain report from the Philippine Bureau of Agricultural Statistics (BAS). Despite the adjustments, output and area harvested in MY 2013/14 still increased compared to the previous year’s level.
Corn imports in MY 2013/14 were raised and increased significantly from the previous year’s level as a result of strong feed demand and the shift away from feed wheat use to imported yellow corn.
Like corn, rice production and area harvested in MY 2013/14 were also revised downwards based on the BAS report, but increased from the previous year’s level.
Milled rice imports were pared down in MY 2013/14 while rice prices continue to increase. Some local press reports allude to the delayed arrival of legitimate imports for the continued increase in rice prices. An ongoing investigation on rice smuggling by the Philippine government, on the other hand, likely dampened the entry of undocumented rice imports.
Imports in MY 2013/14 are likely to be comprised of 250,000 tons of undocumented imports (down from the original 550,000 tons estimate) and 1.2 million tons of legitimate imports (from the previous 1.45 million tons estimate)