June 4, 2008

Philippine 2008 feed output may fall 15 percent to 5.5 million tonnes

Philippine feedmill output could decline by as much as 15 percent to 5.5 million tonnes this year due to surging costs of raw materials, an industry official said Wednesday (June 4, 2008).

Feedmill output in the first three months of the year has already fallen by 15 percent on-year, and the situation could persist for the rest of the year, the official said.

Steady increases in the prices of feed ingredients had already prompted certain small producers to cease operations as of late last year, the official said.

Last year, feed production declined 7 percent to 6.5 million tonnes from output of 7 million tonnes a year earlier.

To keep the industry afloat, the Philippine Association of Feed Millers Inc. has been pressing for the removal of import tariffs on feed ingredients such as soy, soymeal and tapioca, currently pegged at 1 percent, 3 percent and 35 percent, respectively.

Removal of the tariffs would provide some respite for feed millers, and indirectly support the country''s livestock and poultry industries, helping to ensure food security in the country, said Renato Eleria, vice-chairman of the National Federation of Hog Farmers Inc.

The average cost of production for feed millers over the past year has increased by as much as 30 percent over the past year, but it would fall 5 percent to 10 percent from current levels if the tariffs were removed, Eleria said.

The landed price of soymeal has risen about 70 percent to PHP24 (US$0.55) a kilogramme from PHP14/kg (US$0.32) a year ago due to higher commodity and freight costs.