Traders grapple with high rice prices

MANILA, Philippines — Elevated world rice prices, the aftermath of the one-month mandated price ceilings, and a reduced deadline for imports have deterred Philippine traders from bringing more rice into the country, according to the United States Department of Agriculture (USDA).

This led the US agency to maintain its forecast on Philippine rice imports at 3.5 million metric tons from July 2023 to June 2024.

“Industry contacts report continued diminished interest among rice importers due to elevated prices in international markets. President Marcos’ one-month imposition of price ceilings encouraged a wait-and-see attitude, with some importers canceling purchases while the ceiling was in effect,” the USDA said in its latest grain and feed update.

Last September, Marcos issued Executive Order (EO) 39, mandating price caps of P41 per kilogram for regular milled rice and P45 per kg for well-milled rice due to the reported widespread illegal trade manipulation despite ample supply. The price caps were lifted in early October.

The USDA said another factor likely to affect imports going forward is the 30-day deadline to bring in rice following the issuance of a sanitary and phytosanitary import clearance (SPSIC).

“Previously, the deadline for ASEAN rice imports was 60 days, with a 90-day deadline for imports from Myanmar and the rest of the world,” it said.

Earlier this month, the  Department of Agriculture (DA) issued Memorandum Circular 53 that tightened the import process for rice by imposing the shorter ship-out period for importers and traders to ensure that import permits issued by the government will be utilized.

Meanwhile, the USDA noted the possible extension of lower tariff rates on rice, corn and pork until end-2024, which could provide a relief for importers.

“Currently, the Philippines Tariff Commission is conducting a comprehensive tariff review. As part of the public input, consumer advocacy organizations have petitioned to lower rice tariffs indefinitely from 35 percent to 10 percent to provide retail price relief. The proposal has received support from other parts of the government, but a final decision on tariff rates for all commodities will likely take several more months,” it said.

The National Economic and Development Authority (NEDA) Board endorsed the proposed extension of low tariff rates until the end of 2024, which will be reviewed on a semestral basis, to ensure adequate supply and stable prices of these commodities.

Currently, importers enjoy 15 percent in-quota and 25 percent out quota tariff rates for pork, reduced tariff of 35 percent on imported rice, five percent in-quota tariffs on corn, and zero tariff on coal until Dec. 31 under EO 10.

The tariff rates were supposed to revert to 30 percent in-quota and 40 percent out quota for pork, to 40 percent in-quota and 50 percent out quota for rice, to 35 percent in-quota for corn by Jan. 1, 2024.

Last year, the Philippines had overtaken China as the world’s top rice importer anew, based on data from the USDA.

This was not new for the Philippines as it held the top spot in 2008, 2010 and in 2019 again.

The country shipped a record high 3.83 million MT of rice in 2022, government data showed. As of Dec. 14, rice imports had already reached 3.22 million MT.

For this year, the DA expects rice imports to be lower than the record high last year, while production is set to reach 20 million MT, another record performance.

The record high palay production was achieved in 2021 with output at 19.96 million MT.