THE Philippines’s rice imports this year and next year would be below 3.9 million metric tons (MMT), contrary to projections by the United States Department of Agriculture (USDA), due to better local output and higher carryover stocks, an agriculture undersecretary said.
Agriculture Undersecretary for Rice Leocadio S. Sebastian argued that the rice imported by the country last year was “much more” than the domestic supply deficit, thereby trimming the needed importation this year.
The Philippines imported a record-high 3.82 MMT of rice last year, Bureau of Plant Industry (BPI) data showed.
For next year, Sebastian said that improved domestic production would prevent the country’s rice imports from hitting 3.8 MMT.
“We expect to import much less than USDA’s [3.9] MMT projected in 2023. This indicates that the volume we imported in 2022 was much more than the deficit,” he said in a statement to reporters on Thursday.
“We also expect that with the intensified efforts to produce more rice locally, we will import less than the projected 3.8 MMT in 2024. The uncertainty of depending on external sources for our staple and the high price of imported rice makes it imperative for us to produce more locally,” he added.
Sebastian made the remarks after the USDA’s latest monthly report on the world grain market showed that the Philippines might overtake China this year as the world’s rice top importer again.
The September report of USDA projected that the Philippines could be importing a total of 3.9 MMT this year and 3.8 MMT next year. Both quantities are higher than China’s projected rice imports of 3.5 MMT for both this year and next year.
The USDA data showed that the Philippines will surpass China in terms of rice imports because of tepid import demand from the latter due to “reduced price-competitiveness of imports versus domestic rice.”
USDA data showed that China’s rice demand for this year is set to decline to 154.944 MMT from last year’s 156.36 MMT and would further decrease to 152 MMT next year. Unlike China, the Philippines is poised to sustain the increase in its rice consumption to a record-level of 16.4 MMT next year, according to the USDA.
If the USDA’s forecast materializes, then it is not the first time that the Philippines became the top rice importer in the world.
The Philippines was the top rice buyer in the global market in 2019, the same year that it liberalized and deregulated its domestic rice industry, allowing freer entry of imported stocks. (Related story: https://businessmirror.com.ph/2020/01/14/phl-ends-decade-as-worlds-top-rice-importer/)
Prior to the passage of the rice trade liberalization (RTL) law in 2019, the Philippines was the top rice importer for three consecutive years: 2008, 2009 and 2010, according to the USDA. And even before that, the Philippines was the biggest buyer of rice in the world market in 2005, historical USDA data showed.
However, the USDA noted that the Philippines’s buying pattern this year is different from what it exhibited in 2008.
“In 2008, top importer the Philippines continuously bought larger volumes as prices escalated; this year, it is delaying purchases, awaiting lower prices,” it said.
In the past three years (2020-2022), the Philippines has been the second biggest buyer of rice in the world market, according to the USDA.
Regardless of whether the Philippines is the number one or number two in terms of imports, Federation of Free Farmers National Manager Raul Q. Montemayor emphasized that since 2019 the share of rice imports to the country’s total supply has been growing to about 20 percent.
This was an increase from a 10-percent share of imported rice to total rice stocks prior to the implementation of the RTL law, Montemayor added.
The rise in the share of imported rice stocks to the country’s overall supply would mean that it can now further influence the domestic rice prices, he said.
“It only goes to show that our local deficit is increasing. Our production is unable to catch up with the demand so we need to import more to fill up that gap,” he told reporters on Thursday.
“The implication is that we are more reliant on imports,” he added, noting that it would entail being subjected to price movements in the world rice market.
The Philippines is projected to produce 12.631 MMT of rice this year, about 3.369 MMT short of its estimated consumption of 16 MMT, based on USDA data.
USDA data showed that the country would have an ending rice stock of 3.484 MMT for both 2023 and 2024.
The United Nations’ Food and Agriculture Organization (FAO) earlier reported that the Philippines is “underpinning” the world demand for rice. In particular, the FAO cited the Philippines as one of the drivers for the increase in fragrant rice quotations.
“In the fragrant and Japonica segments, August price increases mostly concerned Vietnamese quotations, which rose due to a strong pace of exports and low stocks, as was the case of short-grain rice, or were influenced by Indica price movements, as was the case of fragrant rice owing to strong buying interest from Filipino buyers for mixing,” FAO said in its latest Rice Price Update report.
The BPI, an attached agency of the Philippine DA, data showed that the country has imported 2.332 MMT of rice as of September 7.
