Philippine. Government told to look into feed wheat imports

27.03.2017

The Philippine Maize Federation Inc. (PhilMaize) urged the Department of Agriculture (DA) to investigate the importation of feed wheat last year and determine whether the entire volume was used by manufacturers of animal feeds.

PhilMaize President Roger V. Navarro claimed that not all of the feed wheat imported last year went to feed millers.

“In our estimate, there’s a big entry of feed wheat, which seems suspicious. To avoid paying the 12-percent value-added tax [VAT] for subsequent flour sales, food-grade wheat was declared as feed wheat,” Navarro told reporters in a recent interview.

“Of the 1.6 million metric tons [MMT] estimated wheat imports last year, there’s a discrepancy of 300,000 metric tons [MT], which were unutilized. So where is that 300,000 MT? There could be more,” he added.

The BusinessMirror tried to get hold of officials of the Philippine Association of Flour Millers Inc. and the Philippine Association of Feed Millers Inc. before this story went to press.

Currently, milling wheat imports are exempt from tariffs, but are subject to a 12-percent VAT on the subsequent flour sales, payable at the time the wheat was imported, according to a Global Agricultural Information Network (Gain) report.

Both feed wheat imports and wheat flour imports are subject to a 7-percent duty. The Gain report also noted that feed wheat imports are exempted from the 12-percent VAT.

Milling and feed wheat imports from signatories to the Asean-Australia-New Zealand Free Trade Agreement are duty-free.

Navarro said the discrepancy in the volume of wheat imports may be attributed to technical smuggling. “The imports were declared as feed wheat but are being used for food.”

“The government should really investigate this, [especially since]  the consumption of feeds by the livestock and poultry sectors is not increasing,” he added.

Navarro said he would raise the issue of the imported feed wheat before the corn board in a meeting scheduled this week, which would be attended by Agriculture Secretary Emmanuel F. Piñol.

Citing industry data, the Gain report prepared by the United States Department of Agriculture’s Foreign Agricultural Service indicated that the country’s feed wheat imports reached 2.5 MMT last year.

“Milling wheat imports over the past several years have remained in the range of 2.1 to 2.3 MMT per year, but are expected to increase as additional capacity becomes operational,” the report read.

“The increase in imports has come from feed wheat, which reached around 2.5 MMT in calendar year 2016, according to industry data,” it added.


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