The Department of Agriculture (DA) remains optimistic that Philippine unmilled rice output would reach a record high of 20 million metric tons (MMT) despite the onslaught of El Niño.
Agriculture Secretary Emmanuel F. Piñol said the DA is
banking on the increase in wet season harvest to offset palay damaged by the
weather
phenomenon.
“On rice production, we are still targeting to produce over 20 million metric tons despite El Niño,” Piñol said in an interview with reporters last week.
“Our reported loss is around 120,000 metric tons, which has not yet been validated. We could recover that in the wet season,” Piñol added.
Piñol said the DA revised its initial 2019 palay target of 20.085 MMT to 20 MMT due to the damage caused by El Niño.
The country’s palay output in 2018 declined by 1.09 percent
to 19.066 MMT, from 19.276 MMT recorded in 2017. The reduction in output was
attributed to a series of weather disturbances, including a super typhoon,
last year.
According to the Philippine Statistics Authority (PSA), palay production in 2018 declined slightly due to a contraction in harvest area and yield.
In its March forecast, the PSA also revised downward its projected palay output in the first quarter to 4.62 MMT from its initial estimate of 4.65 MMT.
The latest estimate of the PSA indicated that palay production in the January-to-March period would remain flat.
“Harvest area may contract by 3.3 percent from 1.194 [million] hectares in 2018,” the PSA said.
“However, yield per hectare may increase to 4 metric tons from the previous year’s level of 3.87 MT,” it added.
Rice imports during El Niño years usually exceed 2 MMT as the weather phenomenon dries up farms and destroys standing crops.
For 2019, the United States Department of Agriculture (USDA) said Philippine rice imports could reach a record of 2.6 MMT, but this will be driven largely by strong appetite from traders following the effectivity of the rice trade liberalization law.
In its monthly grains report, the USDA projected that rice exports to the Philippines would expand by 4 percent to 2.6 MMT, from 2.5 MMT in 2018.
“[The 2.6-MMT import volume] is a record not seen since the international price spike in 2008 and would make the Philippines the second-largest global importer in 2019,” the report read.
Government data submitted to the World Trade Organization indicated that this could be the biggest volume of rice to be imported by the Philippines in history, overshadowing the volume it purchased in 2008.
In 2008, Philippine rice imports reached 2.39 MMT, of which 2.297 MMT were bought by the National Food Authority (NFA). In 2010, the country’s rice purchases from abroad reached 2.369 MMT.
‘Thinning supply’
Piñol said, however, that the country cannot simply depend on imports as thinning rice supply will not be enough to meet the requirements of the world’s expanding population.
A local agronomist also said in February that the implementation of the rice trade liberalization law will not necessarily make imports cheaper, as the projected hike in the demand for the staple could make it more expensive and lead to another price crisis.
Additional pressure on thinning rice supply, University of the Philippines Los Baños Agriculture Economist Teodoro Mendoza said, could jack up international and domestic prices as the Philippines is one of the biggest rice importers.
Higher demand for rice in countries like Africa, India and China could further exert pressure on international prices and lead to volatility, Mendoza said.
“It has already happened in 2008 when we imported 2.5 MMT. We were the world’s largest [rice] importer at that time. We also triggered the increase in rice prices which reached $1,000 per metric ton,” he said.
“At that time, our exchange rate was at 47 to the dollar, but now, if rice prices will increase to $1,000 per MT, rice prices, including transportation costs, could reach about P65 per kilogram [kg],” Mendoza added.
Mendoza said the law will eventually discourage farmers from planting rice as prices will go down. He noted that when the President signed the law, the prices of rice already have fallen to around P15 to P17 per kg, from P20 per kg.
He also said the law will displace some 10 million Filipinos working as farmers and farm hands, and other workers in allied industries. This, Mendoza said, could cut rice self-sufficiency level to 70 percent from the current 93 percent.
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