The Philippines, citing the impact of Russia’s invasion of Ukraine on global grain supplies and prices, has reduced its tariffs on corn imports from 35% to 5%, opening up new opportunities for producers American corn.
Corn is a particularly important feed component for Filipino livestock farmers and accounts for half of the production costs of poultry and pork producers in the country, the government said in an executive order signed by President Rodrigo Duterte.
Ukraine is a major global corn exporter, but the Russian invasion continues to prevent Ukrainian farmers from exporting millions of tons of grain through its Black Sea ports. Ukraine is struggling to export its maize and wheat through ports in Poland, Lithuania, Romania and elsewhere, but only a fraction of normal shipments make it.
The Philippines does not tax milling wheat imports and the United States is a major supplier, according to US Wheat Associates. “The Philippines remains a top market for high-quality U.S. wheat with a five-year average export volume of 2.74 million metric tons,” said a USW spokesperson, who noted that the United States retained a market share of over 90% for the country’s milling wheat import market.
The Philippine corn tariff reduction applies to countries like the United States that are not members of the Association of Southeast Asian Nations (ASEAN) and will remain in place for the remainder of 2022. , according to the US Grains Council.
“The U.S. and Philippine agricultural industries have had a strong relationship for a very long time,” said USGC President and CEO Ryan LeGrand. “The Council stands ready to help the Philippine government and industry address any raw material shortages the country is facing. American farmers have a bountiful and sustainable corn crop ready to be deployed when needed.
Philippine imports of US maize have been erratic in recent years. The United States shipped just $2.7 million worth of corn to the country last year after shipping $17.4 million worth of grain there in 2020.
The Grains Council says it hopes the tariff reduction will be extended beyond this year alone.
“If these tariff reductions last for the long term, the Philippines’ livestock industry will have a chance to become competitive again with its ASEAN neighbors,” said Caleb Wurth, USGC Regional Director for Southeast Asia. Southeast and Oceania. “When a steady supply of maize is available, the overall demand for maize increases, as maize remains the energy source of choice for many nutritionists.”
This is not the first time the Philippines has recently reduced import tariffs.
Last year, the country increased its tariff rate quota on pork imports and reduced its tariffs on pork. The in-quota tariff decreased from 30% to 15% and the out-of-quota tariff decreased from 40% to 25%.
The larger pork quota of 254,210 metric tonnes fell to 54,210 tonnes at the end of 2021, but the lower tariffs are still in place after being recently extended until December 31.
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