THE Philippines’s rice imports in the first half expanded by nearly 30 percent on an annual basis to 1.887 million metric tons (MMT), driven by the country’s demand for cheaper supply.
Latest Bureau of Plant Industry (BPI) data showed that rice imports from January to June rose by 433,000 MT from 1.454 MMT recorded in the same period of last year.
Rice industry sources said the landed cost of imported rice remains cheaper than the locally-produced staple, making it more profitable for entities to import rice.
“It’s always about the price. If the landed cost of imported rice plus tariff is cheaper compared to local rice, they will want to import more,” an industry source, who requested anonymity, said.
Another industry source noted that rice prices in key Philippine suppliers, particularly Vietnam, have remained relatively stable in the past months and even lower compared to last year’s quotations.
Latest Food and Agriculture Organization (FAO) global price monitoring report showed that Vietnam rice prices range from $396.5 per metric ton (5 percent broken) to $416.8 per metric ton (25 percent broken).
This translates to a rice price of P21.8 per kilogram to about P22.92 per kilogram at current exchange rates.
FAO data showed that the average price of Vietnam rice (5 percent broken) from January to May stood at $401.2 per metric ton, 19.55 percent lower than last year’s average quotation of $498.7 per metric ton.
Rice industry players have been also stockpiling rice this year amid expectations of tight domestic supply and lower local output due to a spike in production inputs, such as fertilizer. (Related story: https://businessmirror.com.ph/2022/04/25/dim-outlook-fuels-phl-rice-imports-surge/).
BPI data showed that Vietnam remained the country’s top rice supplier at 1.517 MMT, followed by Myanmar at 153,969.28 MT.
BPI data also showed that rice imports from Pakistan, which has been benefiting from lower tariff rates, continued to grow, reaching 111,550.675 MT in end-June. (Related story: https://businessmirror.com.ph/2022/05/28/palace-eo-extends-lower-tariffs-on-pork-and-rice-until-december/)
Rice imports from Thailand reached 95,173.125 MT, while imports from China and India reached 3,591.5 MT and 5,168.385 MT, respectively.
The BPI also issued 453 sanitary and phytosanitary import clearances (SPS-ICs) for rice in June, which has a corresponding total applied import volume of 644,244 MT. The BPI, the agency mandated to oversee rice imports, only issued SPS-ICs in June, based on the agency’s data.
Agriculture officials have openly said the country would have to resort to importation to boost domestic rice supply, especially if local production continues to fall amid skyrocketing fertilizer and fuel prices.
The Department of Agriculture (DA) has estimated that the production cost of rice has increased by P3.13 per kilogram, with total rice output projected to fall by 800,000 MT this year.
Agriculture officials noted that the country has sufficient rice stocks during the lean months of July to September. However, agriculture officials cautioned that rice imports may have to breach the 2-MMT mark to ensure sufficient full-year stocks amid various global economic challenges.
Since the start of the rice trade liberalization (RTL) law or Republic Act 11203 in early 2019, the country’s annual rice imports have been above 2 MMT. Last year, total rice imports were at 2.771 MMT.
The United States Department of Agriculture (USDA) had projected that the Philippines could retain its status as the world’s second largest buyer of rice for the fourth consecutive year in 2023, when total import volume is projected to reach 3 MMT.
The USDA said the Philippines’s rice imports this year and next year would hit 3 MMT. (Related story: https://businessmirror.com.ph/2022/05/16/phl-to-import-more-rice-as-output-to-stay-flat/)
In a statement, the Philippine Rice Stakeholders’ Movement (PRISM) urged President Ferdinand Marcos Jr., the concurrent Agriculture Secretary, to continue the DA’s monthly dialogue with rice industry stakeholders in ensuring the welfare of various players in the value chain.
While the global economy is facing “a potential food crisis due to shortage and unabated price increase, we find it absolutely necessary for both the government and the industry stakeholders to work together and come up with a common solution by synchronizing its efforts to this problem,” the group said.