Average price of rice down slightly

THE GLOBAL average price of rice declined only marginally as overall food prices fell to a seven-year low in January, according to the Food and Agriculture Organization.

Even then, the FAO said “world rice stocks would need to be drawn down to bridge the expected gap between world production and consumption.”

The United Nations agency said worldwide consumption of the staple grain was expected to expand by 1.1 percent, which would keep stable the average consumption per person.

At the start of 2016, the FAO’s Food Price Index averaged at 150.4 points—three points or 1.9-percent lower than the 153.4 points recorded last December.

The index was also 28.5 points or 16 percent lower than the 178.9 points observed in January 2015. More notably, the latest reading was the lowest since April 2009 or close to seven years ago.

The index is trade-weighted and tracks prices of five major food commodity groups on international markets, including meat, dairy, cereals, vegetable oils and sugar.

“The main factors underlying the lingering decline in basic food commodity prices are the generally ample agricultural supply conditions, a slowing global economy and the strengthening of the US dollar,” the FAO said in a statement.

The agency said that as of last month, the Cereal Price sub-index eased by 1.7 percent “amid ample global supplies and increased competition for export markets, especially for wheat and maize, as well as a strong US dollar.”

The FAO-administered Agricultural Market Information System added that overall farm conditions for growing rice in the Philippines remained favorable despite the strong El Niño having reached its peak two months ago.

“In the Philippines, the dry-season crop conditions are favorable but developing dry conditions are expected to impact the crop next month due to El Niño,” the Amis said.

Even then, it said the drought was expected to continue in parts of Southeast Asia where rainfall was already way below normal.

In January, the Philippine Statistics Authority (PSA) said palay output was expected to ease down by 1.5 percent or 20,000 tons in the first semester of 2016 to settle at 8.2 million tons.

The PSA said in its latest production outlook that the volume might decrease as rising yield could fail to offset shrinkage in the area harvested.