DA sees input cost relief after US-Iran peace deal

MANILA, Philippines — The country’s farmers may finally breathe a sigh of relief from surging input and logistics costs following the peace agreement between the United States and Iran.

The Department of Agriculture said it expects the peace deal to ease fuel, fertilizer and freight costs due to the reopening of the Strait of Hormuz.

“The reopening of the Strait of Hormuz will greatly help reduce the cost of inputs in the production and transport of agricultural commodities, especially now as we prepare for a new rice planting season,” Agriculture Secretary Francisco Tiu Laurel Jr. said yesterday.

Fuel prices are expected to return to pre-Iran war levels in the next six to 12 months, according to the Department of Energy.

Tiu Laurel said besides the expected decline in production costs, the reopening of the Strait of Hormuz could also improve the flow of trade between the Philippines and the Middle East.

The region is one of the country’s top export destinations for local agricultural and food products.

Philippine shipments to the Middle East are mainly composed of fresh pineapples and Cavendish bananas. Also included are processed goods such as canned tuna, sardines, coconut products and other snack foods.

The agency earlier said that continued disruption to oil and fertilizer trade could lead to higher production costs, lower farm output and elevated food prices.

Estimated rice production from input costs could drop to about 18.8 million metric tons this year, according to the DA.

The reopening of the trade route could allow farmers and the government to focus on the next planting cycle and brace for other possible weather-related hurdles.

Tiu Laurel added that the anticipated reduction of input costs is one less concern for the sector and would allow the DA to focus on the incoming El Niño.