THE country’s rice imports in the first quarter surged by almost 70 percent year-on-year to 985,139.995 metric tons (MT) as importers brought in more staple food in anticipation of tighter world supply coupled with lower domestic staple output.
Latest Bureau of Plant Industry (BPI) data showed rice imports during the January-to-March period were 404,057.065 MT higher than the 581,082.93 MT recorded in the same period of last year.
In March alone, about 414,243.005 MT of rice entered the country, based on BPI data released to the public.
Historical BPI data showed that the 985,139.995 MT of rice imports from January to March is the highest first-quarter import volume recorded by the country since the implementation of rice trade liberalization (RTL) law in 2019.
Agriculture Undersecretary for Policy, Planning and Research Fermin D. Adriano cited two possible reasons for the imports’ rise: the importers’ expectation of tighter global staple supply and the projected lower domestic rice output.
Adriano explained that some wheat-eating countries in Sub-Saharan Africa and Middle East are projected to shift to rice due to global supply problems of wheat caused by the Ukraine-Russia war.
Importers also brought in more rice from abroad to replace the projected decline in local palay production due to lower yield, as Filipino farmers reduced fertilizer application, added Adriano.
The DA, Adriano disclosed, estimated the second quarter rice output to decline by 800,000 MT as farmers reduce fertilizer application amid soaring fertilizer prices in recent months.
Adriano explained that the projection was made by the DA’s Philippine Rice Research Institute even before the Ukraine conflict, which impacted global supply chains.
Confluence of events
Monetary Board member V. Bruce J. Tolentino said the rising rice imports may have been a result of a confluence of events — importers’ consideration for the country’s current stock level, trade conditions, as well as factors affecting domestic consumer demand.
“They all need to make money and NFA is no longer a major factor in the determination of market prices. The importers need to decide what kinds and quality of rice they want to bring in, and to find the most competitive supplier from various rice exporting countries,” Tolentino told the BusinessMirror.
“Given the above, currently wheat prices are high, and there is some substitution between wheat and rice, especially in flour and feed. Low-quality rice can also substitute for corn in feed production,” Tolentino added.
Philippine Chamber of Agriculture and Food Inc. President Danilo V. Fausto told the BusinessMirror that rice importers are already stockpiling to ensure sufficient supply amid market uncertainties caused by the Ukraine-Russia war.
“They are perhaps preparing already for the rainy season,” Fausto said.
However, Fausto criticized the nearly 1 million metric ton (MMT) of rice imports in the first quarter alone, arguing that it was against the agreement between the DA and the rice industry to manage imports during harvest season.
Total rice imports could easily reach 3 MMT this year if the rate of volume entering the country continues in the succeeding months, he warned. However, Adriano expects the volume of rice imports to slow down by the second half due to higher prices in the global market.
January 1 to April 14
BPI data also showed that rice imports from January 1 until April 14 breached the 1-MMT level, having reached 1.043 MMT, with Vietnam accounting for 75 percent (780,772.190 MT) of the total volume.
BPI data also showed rice imports from countries outside Asean, like Pakistan increased during the reference period. Pakistan exported 70,957.5 MT of rice to the Philippines from January 1 to April 14, more than double the 25,286 MT it shipped for the whole year of 2021, based on BPI data.
The top rice importer from January 1 to April 14 was Bestow Industries Inc. at 80,115 MT, followed by Lucky Buy and Sell at 42,497 MT.
BPI data also showed the Department of Social Welfare and Development (DSWD) imported 3,909 MT of rice in the reference period. The volume is 43.25 percent more than the 2,602.912 MT total rice imported by the DSWD for the whole year of 2021, BPI data showed.