PH braces for even higher food prices in Q4 | Inquirer Business

PH braces for even higher food prices in Q4

/ 02:08 AM October 24, 2022
Shoppers inside a wet market. STORY: PH braces for even higher food prices in Q4

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MANILA, Philippines — The pressure that keeps food inflation elevated in the Philippines has increased with the La Niña weather phenomenon expected to prevail over the remainder of this year, and possibly even extend until the first quarter of 2023.

At the same time, global prices of rice rose in September after holding steady in August and decreasing in July.

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In the Philippines, La Niña increases the likelihood of above-normal rainfall, which could lead to the destruction of crops and hamper the production of other agricultural commodities that are already in short local supply.

Over the past four weeks, four tropical cyclones entered the Philippine area of responsibility, including Super Typhoon Karding which wiped off about P3.2 billion worth of crops, livestock, and other goods from the country’s gross domestic product.

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Of the total value lost to Karding, rice accounts for P2 billion.

According to the latest bulletin from the Climate Prediction Center, which is part of the United States National Oceanic and Atmospheric Administration, indicators of an active La Niña system eased in September but not enough to predict an end to the phenomenon.

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Chances that the La Niña climate phenomenon will continue to prevail in the next three months are now 75 percent from the 91 percent forecast in September.

For February up to April 2023, La Niña is still more likely to continue with a 53-percent chance.

In September, when another super typhoon — Josie — ravaged farms, inflation in the Philippines rose to 6.9 percent from 6.3 percent in August.

The Philippine Statistics Authority (PSA) said this was mainly driven by a faster rate of increases in the sub-groups of food and nonalcoholic beverages; and housing, water, electricity, gas, and other fuels.

In particular, fast-increasing prices of foodstuffs like eggplant, tilapia, and refined sugar as well as electricity, housing, and wood fuel (firewood) contributed to the increase in overall inflation.

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In September, inflation for food alone was pegged at 7.7 percent — meaning prices were that much higher compared to prices in September 2021. This was faster than the 6.5 percent overall inflation recorded in August.

The pace of rising prices in most food items could not be offset by slower increases in the prices of meat and slaughtered animals as well as fruits and nuts.

According to the Food and Agriculture Organization (FAO) of the United Nations, the FAO Food Price Index — the gauge for world food commodity prices — declined for the sixth month in a row in September, with sharp drops in the quotations for vegetable oils more than offsetting higher cereal prices.

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