Price pressures on food seen to remain strong in next 3 months

Upward pressures on food prices in the Philippines  are expected to remain high over the next three months as the La Niña phenomenon remains entrenched, although it is now more likely to dissipate as early as February 2023.

Government officials and market analysts are expecting inflation in the country to rise further from 7.7 percent in October and reach a peak in November or December, and remain high although slowly going lower next year.

Across the globe, the downtrend in overall food prices almost ground to a halt with the Food Price Index of the United Nations’ Food and Agriculture Organization registering at 135.9 point in October from 136 point in September.

The index has been receding month after month since 159.7 point in March — even dropping by as much as 14.1 points to 140.6 in July — but the FAO said that it was “virtually unchanged” in October.

La Niña brings to the Philippines increased likelihood of above-normal rainfall, which could lead to the destruction of crops and hamper production of other agricultural commodities including fish and other seafood.

Over the past two months, destructive tropical cyclones have hit the Philippines, including “Karding” that wiped out about P3.2 billion worth of crops, livestock and other goods as well as “Paeng” that destroyed 3.16 billion of the same.

Of the total value lost to Karding, P2 billion accounts for rice. Paeng destroyed P1.95 billion worth of the staple grain.

According to the latest bulletin from the Climate Prediction Center (CPC), which is part of the United States National Oceanic and Atmospheric Administration, indicators of an active La Niña system strengthened.

Chances that the La Niña climate phenomenon will continue to prevail in the next three months — December to February is now 76 percent from the 75 percent forecast in October.

For February up to April 2023, the likelihood that La Niña is absent was pegged at 57 percent. A month ago, the forecast was that the climate phenomenon had a 53-percent chance of continuing.

The Philippine Statistics Authority said that in October, higher inflation was mainly driven by a faster rate of increases in prices of foodstuffs like meat, vegetables and tubers, and fish and other seafood.

Last October, inflation for food and nonalcoholic beverages was pegged at 9.4 percent, faster than the 7.4 percent recorded in September.