Rice imports to flood market amid tight supply

MANILA, Philippines — Amid the continued tight supply of Filipinos’ main staple in the market, the Philippines is set to import 750,000 metric tons of rice until yearend and another one million MT by 2019 to help stabilize prices and boost national inventory.

Agriculture Secretary Emmanuel Piñol said the interagency National Food Authority Council (NFAC) has approved the importation of the 500,000 MT of rice on top of the earlier approved 250,000 MT, for a total of 750,000 MT set to arrive until end-2018.

Piñol now chairs the NFA Council after the grains agency has been officially transferred back to the Department of Agriculture (DA) by virtue of Executive Order 62 issued last week.

The NFA Council members have been known to disagree on matters of importation. The Council, in fact, deferred several times earlier this year the proposal to import, which eventually led to the wrong timing of arrival of stocks.

“It will all be 25 percent brokens. The Council also approved the standby authority importation of one million metric tons for 2019,” Piñol told reporters after the NFAC meeting on Monday.

“The message we want to get across to those hoarding rice right now is you better release your rice in the market or else your stocks will be affected once the NFA importation arrives,” he added.

The added importation for the last quarter of the year will bring total imports to 1.25 million MT for the whole 2018.

The NFA Council has yet to determine the mode of importation for the 750,000 MT.

“I told them that I don’t care how they do it, what alphabet they use in importing, whether G2P (government-to-private), G2G (government-to-government) or XYZ, what is important is that they bring in the rice stocks as soon as possible,” Piñol said.

“If the rice traders who are holding on to their stocks right now believe that they can blackmail the government, they are wrong,” he added.

Last May, the Philippines imported the first batch of 250,000 MT which was immediately followed by another 250,000 MT in June.

The arrival of the second batch has yet to be completed as only 162,000 MT has entered the country. The imports, however, have failed to lower prices due to delays in the release in the market.

The government now plans to flood the market with the 750,000 MT of rice in hopes to finally bring down the price of the commodity.

This after rice prices hit an all-time this year, with the wholesale price of well-milled rice rising 17 percent to P45.51 per kilo and average retail price increasing to P48.93 per kilo, up by 16 percent year-on-year.

The wholesale price of regular-milled rice was P43.13 per kilo, 21 percent higher than the previous year. Its average retail price also increased 20 percent to P45.71 per kilo.

Meanwhile, the government’s plan to import another one million MT next year is still quite conservative, considering the latest projection of the United States Department of Agriculture (USDA) of 1.5 million MT.

This is amid high rice prices due to tight supply, rising fuel prices, market distribution inefficiencies and preparation for the midterm elections set in May 2019.

Production of milled-rice next year is only seen increasing by one percent to 12.35 million MT from the expected 12.23 million MT this year.

USDA said there may be slight improvements in area planted as rice areas in 2019 will be at 4.85 million hectares, less than one percent higher than the 4.84 million hectares this year.

In terms of ending stocks, USDA said the Philippines will likely end 2018 with a carryover volume of 2.78 million MT for 2019.