DOF backs increase in rice importation
Lower global prices and higher stock volumes of rice would augur well for the government’s plan to import more of the commodity early next year to temper domestic price movements amid the El Niño, according to the chief economist of the Department of Finance.
“To stabilize rice prices, the Philippines should take advantage of external sources to fill in the gap in domestic demand and the anticipated lower domestic production due to the ongoing dry spell and the damage inflicted by Typhoon ‘Lando,’” Finance Undersecretary Gil S. Beltran said in an economic bulletin.
Citing World Bank data, Beltran noted that global rice prices, as represented by Thai rice, had declined from $423 per metric ton to $385 per MT this year, although prices were expected to slightly rise to $387 per MT next year.
“For the next five years, [global rice] price increases may register less than 1 percent a year,” he added.
“In its October Commodity Markets Outlook, the World Bank assesses that it is unlikely that the current El Niño episode causes spikes in global agricultural prices given ample supply of major agricultural commodities, weak links between global and domestic prices, and limited impact of past episodes,” Beltran said.
Still, Beltran pointed out that the World Bank “cautions that the impact of the dry spell is likely to be predominantly local rather than global because markets are currently well-supplied unless a significant player is significantly affected so as to send ripples in the international market.”
The National Economic and Development Authority (Neda) was seeking President Aquino’s approval for its proposal to import more rice early next year while the state planning agency was assessing the impact of a possibly weaker El Niño as well as the crop damage caused by Lando.
This intervention formed part of the proposed Roadmap to Address the Impact of El Niño or “Rain,” aimed at mitigating the drought’s impact on food supply, ensuring stability of food prices, and providing assistance to farmers and households in adversely affected areas.
