DA ready to sell rice at P40 per kilo

MANILA, Philippines — The Department of Agriculture (DA) said it may sell rice at P40 per kilogram if prevailing retail market prices soften as soon as more imported rice slapped with lower tariff rate arrives in the country in the coming months.

Agriculture Secretary Francisco Tiu Laurel Jr. said the price of rice being sold by the DA through its Rice-for-All program could decline by P5 per kilogram once prevailing market prices ease.

“If the (retail prices of rice) in the market reach P45 (per kilo), then our Rice-for-All program would be priced at P40 per kilo,” Tiu Laurel said in an online interview recently.

The Rice-for-All program, which started last Aug. 1, sells well-milled rice sourced from local importers and traders to the public at P45 per kilo, with a limit of 25 kilos per day, lower than prevailing prices of P47 to P55 per kilo.

The agriculture chief is maintaining his earlier forecast that local rice prices would fall only by October once a substantial amount of rice imports levied with lower tariffs of 15 percent enter the country.

The government earlier estimated that rice prices would decline by P5 to P7 per kilo because of the tariff reduction to 15 percent from 35 percent, which took effect last July 5.

Tiu Laurel has been emphasizing in the past weeks that the decrease in rice prices would not happen overnight as it would take time before the old stocks bought by traders at higher tariff rate would be replaced with cheaper ones.

Earlier, rice industry stakeholders disclosed that they are facing cancellation of contracts from Vietnam, the country’s top supplier of rice, as exporters seek to renegotiate for higher prices to reflect present market conditions.

Agriculture officials have noted that rice import arrivals since the tariff reduction have slowed down as traders and importers are taking some time disposing of their old stocks.

Rice imports in the first half averaged around 400,000 metric tons before dropping to an average arrival of 200,000 MT in July and August.

Last week, Tiu Laurel extended the deadline for the arrival of rice shipments to allow local importers to negotiate better rates for their imports amid threats that their contracts are being canceled due to volatility in prices, resulting in lower landed costs and retail prices.

Industry sources told The STAR that rice traders and importers have appealed to the Bureau of Plant Industry (BPI), which issues the SPSIC, to extend the must ship-out deadline after they faced cancellation of contracts by Vietnamese exporters, who are seeking better prices for their stocks.

Vietnam accounts for at least three-fourths of the country’s annual rice imports.

The extension of the must ship-out date would provide rice importers with the “flexibility” to look for other suppliers should their contracts be cancelled within the 60-day deadline, said Danilo Fausto, president of the Philippine Chamber of Agriculture and Food Inc.

Fausto said some Vietnamese rice exporters are taking advantage of the government’s decision to lower rice tariffs to 15 percent by hiking their export prices.

The Philippine Rice Industry Stakeholders Movement co-founder Orly Manuntag earlier said rice export prices in the neighboring Southeast Asian country have increased by $60 to $70 per metric ton, forcing Vietnamese suppliers to call off contracts with Philippine importers.

International reports indicate that Vietnamese rice export prices have steadily increased in recent months on the back of foreseen higher global demand for the grain, especially in neighboring countries like the Philippines and Indonesia.

The rise in export prices would reduce whatever savings would be generated and passed on to consumers due to the tariff reduction, they added.