The Philippines, the second most populous country in Southeast Asia, is now the 9th largest market in the world for U.S. agricultural exports as it cracked the top 10 for the first time in 45 years, a report by the U.S. agriculture attaché said.
U.S. agriculture export sales to the Philippines rose 10% in 2012 to $2.3 billion and are seen hitting $2.5 billion in 2013, the report said.
Attaché reports are put together by U.S. agriculture experts at its embassies but are not official data from the U.S. Agriculture Department. They are considered as authoritative by the commodity trading community.
“All indications are for continued strong growth in 2013, (with export sales) currently forecast to reach $2.5 billion,” the report prepared by William Verzani and approved by Philip Schull said.
“A thriving economy, a booming food processing sector, a strengthening peso, and dominant market shares in milling wheat (at virtually 100%) and soybean meal (at 60% compared to 43% in 2011) made the Philippines the 9th largest U.S. market in this vibrant sector through October 2012,” the report said.
The top 10 U.S. agricultural exports to Manila in order of value were wheat, soybean meal, dairy products, red meats (fresh, chilled, and frozen), poultry meat, feeds and fodders, snack foods, processed fruits and vegetables, fresh fruits and red meats (prepared and preserved).
“The U.S. continues to be the Philippines’ number one supplier of agricultural products,” the attaché report said.
“However, competition has greatly intensified and new challenges have emerged for U.S. exporters due to recent bilateral and regional free trade agreements.”
In wheat, the U.S. is still the primary source of the grain for the country of nearly 100 million people. U.S. wheat is the primary ingredient in the pan de sal bread used by millions as part of their breakfast staple.
Australia, which enjoys cheaper shipping costs to Manila, has emerged as a competitor for U.S wheat.
The attaché report said “good sales opportunities” for U.S. agricultural exporters abound “because of the robust Philippine economy, steady growth in the country’s retail, food service and food processing sectors, and consumer familiarity with American brands.”
The Philippines posted one of the fastest economic growth rates within the ASEAN region through the 3rd quarter of 2012.
Most economists said two factors were fueling the economic growth: remittances sent by about 10 million Filipinos working outside the country and the business outsourcing centers in the country.
The attaché report said the World Bank projected remittances to the Philippines will hit $24 billion in 2012, up 20% from the previous year, making the country the world’s third-largest recipient of money sent by overseas workers.
The country’s business process outsourcing (BPO) sector expects profits to reach $14 billion in 2012, up 28% from the previous year. – Rappler.com
Note: The Philippine Commodities Digest is a weekly publication of New Jersey-based A & V Media, providing a comprehensive roundup of developments and trends in the country’s key farming and mining sectors
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