PHILIPPINES — The Philippines, citing the impact of the Russian invasion of Ukraine on world grain supplies and prices, recently announced plans to reduce its tariff on corn imports from 35% to 5%, a move that the US Grains Council (USGC) said would present new opportunities for US corn producers.
With Ukraine, one of the world’s leading corn suppliers, unable to ship grain out of its ports because of Russia’s naval blockade global supplies have dwindled in recent months while the price of corn has risen significantly.
U.S. Grains Council President and CEO Ryan LeGrand said the tariff reduction was a responsible step by the Philippine government as it encounters domestic inflationary pressures.
“The US and Philippines agricultural industries have enjoyed a strong relationship for a very long time,” said LeGrand. “The Council is standing by, ready to help the Philippine government and industry fill in any raw material supply shortage the country is facing. US farmers have an abundant, sustainable corn crop ready to deploy when needed.”
The United States Department of Agriculture-Foreign Agricultural Service in Manila (USDA-FAS Manila) said in a recent report that Philippines’s corn imports in marketing year (MY) 2022-2023 may expand by 50 percent to 750,000 metric tons (MT).
This comes as importers try to fill the anticipated supply gap in feed wheat due to the Ukraine-Russia conflict, and corn is expected to supplement some feed wheat demand
The Philippines feed industry relies heavily on feed wheat imports due to its history of high import tariffs on corn outside ASEAN. The recent global wheat supply chain disruptions have had a disproportionally negative impact on Philippine input prices.
“If these tariff reductions stick long term, the Philippine livestock industry will have a chance to become competitive again with their ASEAN neighbors,” said Caleb Wurth, USGC regional director for Southeast Asia and Oceania.
“When a steady supply of corn is available, the overall demand for corn grows, given corn is still the energy source of choice by many nutritionists.”
This higher demand for corn will also help local corn producers join the global corn market, increasing efficiency and profitability, said Wurth.
However, Philippine Maize Federation (PhilMaize) president Roger Navarro expressed hope that the reduced tariffs for corn imports would be temporary, and that the tariff collections generated would be allocated for the development of the corn sector.
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