The United States Department of Agriculture (USDA) expects Philippine wheat imports to fall by 500,000 metric tons this year, largely due to a decrease in demand.
The decline is a reflection of a year-on-year decline in both food and industrial uses of wheat.
Consumer preferences in the Philippines have shifted towards Western diets, leading to an increase in wheat consumption for products such as pizza, pasta, and bread. However, with the Rice Tariffication Law implemented in 2019, local rice prices have decreased and rice consumption has increased, impacting the demand for wheat.
Additionally, the COVID-19 pandemic has led to more people eating at home, resulting in a shift in consumption back to rice due to tight global supplies and increased prices for wheat-based products.
The high sugar prices in the Philippines have also reduced bakery profitability, leading to a decrease in demand for wheat.
The Philippines differentiates between wheat for human consumption and wheat for animal feed.
With the recent reduction in corn tariffs, some feed millers have replaced wheat with corn, further decreasing the demand for wheat.
Furthermore, challenges facing the poultry and swine industry in the Philippines due to diseases such as bird flu and African Swine Fever have also contributed to the decrease in demand for wheat.
Despite the decrease in demand, the Philippines remains an important market for wheat exports, with the US being the largest supplier of wheat to the country in 2020, followed by Canada, Australia, and Russia.
The USDA report highlights the importance of monitoring market trends and identifying opportunities for growth in the wheat sector to ensure the continued competitiveness of US wheat exports in the Philippines and other key markets around the world.
