Palay production seen to drop this year

Palay production is expected to drop further to 12.68 million metric tons (MT) this year from the original forecast of 13.3 million MT as the El Niño weather phenomenon will considerably bring down the third quarter crop.

The latest rice and corn production survey of the Bureau of Agricultural Statistics (BAS) show that because 90 percent of the areas producing these crops experienced scant rainfall during the planting season, the projected output for the entire year and the third quarter went down.

This year’s palay output according to BAS, will fall by 2.1 percent or 270,000 MT to 12.68 million MT from 2001. The decline is due to the contraction in harvest area, along with a 1.6 percent drop in yield per hectare.

This will so far be the fifth time that the BAS has revised its palay production forecast. Earlier this year, it projected production to hit 13.3 million MT but early indications of El Niño forced it to bring this down to 13 million MT, then 12.95 million MT, 12.7 million MT and finally, 12.68 million MT.

While the first semester output increased by 1.9 percent to 5.67 million MT from 5.57 million MT in 2001, the July-December crop is seen to drop to 7.01 million MT or 5.1 percent lower than the previous year’s 7.39 million MT.

BAS blamed the reduced output to the third quarter harvest that was affected by prolonged dry spell during the planting period.

The July-September crop was forecast to slide to 1.93 million MT, 474,000 MT short or 19.7 percent lower than last year’s 2.41 million MT output.

BAS added there was a major contraction in the period’s hectarage especially in the Cagayan Valley, Western Visayas and Socsargen area which could result in a total production shortfall of 362,000 MT.

On the other hand, total corn output this year will be 4.1 percent lower at 4.34 million MT from 4.52 million MT in 2001. The decline is due to a 48 percent reduction in harvest area and a decrease in yield per hectare by 2.2 percent from 1.82 to 1.78 MT.

For the July-December crop, output is expected to reach 2.41 million MT or 6.3 lower than 2001’s crop owing to anticipated cut in total area planted to the commodity.

There is an expected drop in production for both the third and fourth quarters with the intense dry spell felt mostly in the Cagayan Valley, Isabela, Bukidnon, Northern Mindanao and Lanao del Norte.

As a result of the anticipated production drop, the government will need to initially import 800,000 MT of rice in January next year to blunt the possible harsh effects of the El Niño.

Outgoing National Food Authority (NFA) Administrator Anthony Abad said rice imports will be shipped to the country in the first quarter instead of the usual second quarter to ensure government has adequate buffer stock to augment the shortfall in local rice supply.

The NFA usually keeps a 30-day buffer stock level to meet the estimated domestic daily rice consumption of 25,700 MT.

"Initial figures show that 800,000 MT might be needed, but everything will depend on the rice price and supply situation in the first quarter. If 800,000 MT is not enough, we might need to import more," said Abad, adding that BAS will constantly be updating and validating its survey of palay production.

Abad said the government is looking at India, Vietnam, Thailand and China as possible sources of rice imports.

Meanwhile, the country’s growing dependence on rice imports could backfire as the world’s biggest rice exporters are forming a cartel-like organization similar to the Organization of Petroleum Exporting Countries (OPEC) that single-handedly dictates world oil prices.

Local grains industry leaders under the Philippine Confederation of Grains Associations (Philcongrains) Helculano "Joji" Co, Jr. said major rice exporters such as India, Pakistan, China, Thailand and Vietnam are meeting on Oct. 8 in Bangkok to discuss the formation of an Organization of Rice Exporting Countries (OREC).

Co said ocuntries that rely too much on rice imports could be at the mercy of the OREC and rice prices could soar uncontrollably.

"This move by the major rice exporting countries is alarming to countries that are dependent on rice imports like the Philippines. This could mean the international caterlization of rice and these countries could dictate prices," Co said.

Co said government should reduce its rice imports and instead focus on raising the efficiency of local agriculture that will result in self-sufficiency in rice.

"Instead of promoting self-sufficiency, government is not only promoting import dependence but is even trying to convert the farmers into promoters, this is ridiculous because no farmer group at the moment is capable of importing rice," said Co.

By next year, government will import at least 800,000 metric tons of rice and this could further go up depending on the result of the palay crop production survey of the BAS.

Government is looking at India, Vietnam, Thailand and China as possible sources of rice imports and it will allow not only farmer cooperatives but all interested groups or individuals to import the commodity.