Rice imports to reach 2.6 million MT

MANILA, Philippines — The Philippines is projected to further increase to 2.6 million metric tons this year due to strong pace of trade and large purchases from Vietnam.

In a report, the United States Department of Agriculture-Foreign Agricultural Service (FAS) said it is revising upward its rice forecast imports for the Philippines by 300,000 MT from its previous 2.3 million MT forecast.

“This year, a variety of factors explain why imports remain strong, especially in September and October. Pent-up demand and the overdue fulfillment of late shipments from top supplier Vietnam may partly explain higher imports in September and October,”the USDA said.

It said the opening of the economy from previous COVID-19 restrictions also boosts consumer demand.

The USDA also pointed out that tighter supplies from a smaller third-quarter crop increases the need to supplement total supply with additional imports.

“The Philippines has multiple rice crops throughout the year and the government often uses import licenses as a way to manage imports in the run-up to its harvests. This is especially common before its main harvest beginning in mid-September, thus imports historically dip down then,”the USDA said.

“This year, the Philippine government has been more liberal with its issuance of import licenses and issued more than twice the number of licenses and quantity contained within the licenses for import in July and August compared to the same period last year. It continued to issue import licenses through October,”it added.

The USDA expects the Philippines to continue to import rice in November and December, albeit at a much more muted pace.

“The Philippine government stated it anticipates a fourth-quarter bumper crop (October-December) and buyers have indicated the government is not approving additional licenses,”it said.

The USDA also revised upwards its rice import forecast for the Philippines for 2022 by 200,000 MT to 2.4 million MT from the earlier projection of 2.2 million MT, as the demand from Vietnam is expected to continue.

Rice consumption forecast is also expected to grow to 14.85 million MT next year, higher than the 14.55 million MT projected.

For this year, the Philippines is seen to remain the third largest importer of rice globally, following China and Bangladesh, which are projected to import 4.5 million MT and 2.65 million MT, respectively.

The USDA earlier said the government’s move to lower tariffs on rice imports is unlikely to impact suppliers in Western Hemisphere due to higher transportation costs.

“The new policy on MFN tariffs is likely to have less impact on Western Hemisphere suppliers than other non-ASEAN exporters in Asia,” the USDA said.

“Exports from the Western Hemisphere are expected to remain limited, as combined price, tariff, and transportation costs are higher than Philippine domestic prices,”it added.

On May 15, President Duterte issued executive order 135, which lowers the tariff for both in-quota rice imports or those under the minimum access volume and out quota imports will be lowered to 35 percent for one year to diversify the country’s market sources, increase rice supply and maintain stable prices.