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PHL wheat import outlook cut on weak animal feed demand

PHILIPPINE wheat imports are expected to total 6.8 million metric tons (MT) in the 2020-2021 marketing year (MY), downgrading its previous estimate of 7 million MT due to weaker demand for animal feed, the US Department of Agriculture (USDA) said.

In a report, the USDA’s Foreign Agricultural Service said the Philippine trade in wheat rose 9% year on year to 2.3 million MT in the three months to September, which is also the first quarter of MY 2020-2021.

“Milling wheat from the US drove this growth, as contacts report the bakery and noodle sectors doing well during the pandemic,” the USDA said.

“With 1 million MT shipped from July to September, the Philippines is currently the largest destination for US wheat,” it added.

The USDA added that a decline in feed wheat consumption due to African Swine Fever (ASF) is expected to offset higher milling wheat demand.

It said Philipine hog producers have downsized due to ASF, with more than 400,000 animals culled as a result of the virus.

The USDA said the animal feed segment will also be hampered by restrictions on the issuance of Sanitary and Phytosanitary Import Clearances (SPSICs), and additional requirements for obtaining the document.

“Importers have reported unpredictability in the issuance of import clearances during the last three months,” the USDA said.

Meanwhile, the USDA projected Philippine corn production for MY 2020-2021 at 8.2 million MT, across a harvestable area of 2.6 million hectares.

It added that corn imports during the period at 600,000 MT.

Under the new guidelines set by the Department of Agriculture, new requirements are now needed for corn and wheat import clearances, including a description of the commodities, an affidavit declaring the shipment’s purpose, and a separate SPSIC for every shipment with a different declared purpose, among others.

“Industry contacts have noted that new requirements in the recently issued Memorandum Circular No. 39 could disrupt corn exports and limit feed availability and affordability in 2021,” the USDA said.

The USDA estimated Philippine rice output at 12 million MT during MY 2020-2021, harvested over 4.65 million hectares.

Its rice import estimate was cut to 2.3 million MT for the year from the previous estimate of 2.6 million MT, as a result of the SPSIC bottleneck.

“The Bureau of Plant Industry (BPI) issued 678 SPSICs from July to October in 2020 for 490,441 MT, down 53% from the 1.19 million MT representing 1,462 SPSICs issued during the same period in 2019,” the USDA said. — Revin Mikhael D. Ochave

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