The country’s rice imports in the first quarter declined by 6 percent to 575,242.93 metric tons from 614,091.36 MT in the same period of last year as higher global prices and higher domestic harvest dampened import demand.
Latest Bureau of Plant Industry (BPI) data obtained and analyzed by the BusinessMirror showed that rice imports in the January-to-March period was 38,848.43 lower than the 614,091.367 MT recorded in the same period of last year.
BPI data showed that rice imports in March fell to a four-month low at 112,669 MT, which was 56.85 percent lower than the 261,091.5 MT imported in the same month of last year.
BPI data showed that bulk of the rice imports in the first quarter or about 493,891.55 MT came from Vietnam. The figure was almost 4 percent lower than the 513,628.3 MT volume of rice imported from Vietnam in the January-to-March period of 2020.
Monetary Board member V. Bruce J. Tolentino told the BusinessMirror that higher domestic rice harvests, as well as increased international rice prices could be the reasons behind the decline in imports.
Citing data from the Philippine Statistics Authority (PSA) and Department of Agriculture (DA), Tolentino noted that the country is currently “enjoying record rice yields and harvests.”
Latest PSA forecast, as of March 1, indicated that the country’s rice harvest in the first quarter could have increased by 7.27 percent to 4.57 million MT from 4.26 million MT recorded last year.
The DA is eyeing a record-high palay harvest this year of about 20.4 MMT, which would allow the country to achieve a 93-percent sufficiency level in rice.
Furthermore, Tolentino said international rice prices have moved up “due to deliberate efforts by both Thailand and especially Vietnam to dominate the market for high quality and high priced aromatic rice.”
“Myanmar is having problems meeting it’s supply contracts due to domestic unrest. But the increases have been moderated by the growing role of India in the global rice market,” he said.
United Nations’ Food and Agriculture Organization (FAO) data showed that the average quotation for Vietnam rice (5 percent broken) in the first quarter reached $507.4 per MT and $484.6 per MT for its 25 percent broken variety. The figures were 36.9 percent and 38.3 percent higher than their respective quotations in the previous year, based on FAO data.
Likewise, Thai rice quotations have gone up by 17 percent to $529.6 per MT (25 percent broken) and 16.6 percent to $561.2 per MT for its 100 percent broken variety, FAO data showed.
However, Tolentino noted that the country doesn’t have “enough experience and data to be able to estimate elasticities,” which means “how much the Philippines’ demand for international rice responds to price changes.”
“But we can at least now expect the domestic market to be more responsive to market trends with the shift from quotas to tariffs,” he said.
Federation of Free Farmers Inc. National Manager Raul Q. Montemayor said it seems rice importers cut their purchase abroad as their margins have been reduced given the higher world market prices of the staple.
Montemayor added that rice wholesale prices are now being influenced by domestic production, thus making importers to think twice if their landed costs would be able to compete with prevailing market prices.
“They are really looking at the prices. If they will not earn much from the landed cost then they will reduce their volume,” he told the BusinessMirror.
“Furthermore, what we are seeing is that local production is being able to dictate the wholesale rice prices. Unlike before, importers dictate the wholesale prices then the local traders adjust accordingly,” he added.