Rice stocks seen at record levels with more imports, local production

If forecasts are accurate, the Philippines, the world’s second largest rice importer, will have more than enough rice for this year, with both local production and rice imports seen growing at record levels.

The latest report of the United States Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) showed that the Philippines is expected to increase its rice stocks amid larger crops.

It also expects the country to import as much as 2.8 million metric tons (MT) of rice, which is higher compared to its previous official forecast of 2.6 million MT and last year’s actual imports of 1.9 million MT.

FAS, however, had its reservations on its forecast. It said that in terms of rice imports, the outlook for the Philippines is actually “down 100,000 tons to 2.7 million MT” because of “ample stocks and larger forecast production.”

USDA, however, justified its forecast and the need for the Philippines to import more rice despite the increase in production because of higher consumption. It said that consumption is expected to rise on “both abundant local supplies and relatively low priced imports.”

Rice consumption is estimated to increase to 14.45 million MT from 13.9 million MT, the USDA said.

For this year, Agriculture Secretary Emmanuel Piñol said the country’s rice production could l hit a record level of 20 million MT, higher than the 19 million MT produced last year.

As of April, the country’s total rice inventory was already estimated at 2.6 million MT, data from Philippine Statistics Authority (PSA) showed.

Such level of stocks was 20.5 percent above the previous year’s record of 2.18 million MT and 18.4 percent higher than previous month’s level of 2.2 million MT.

Concerns were earlier raised about the excessive amount of rice entering the country as this may bring down prices to the detriment of the local farmers.

During the first quarter of the year, the gross value of palay or unhusked rice output already declined by 11.52 percent due to lower volume of production and price cut.

Federation of Free Farmers (FFF) and Federation of Free Farmers Cooperatives (FFFC) said any decline in palay prices should be blamed on the passage of Rice Tariffication Law, which now allows the entry of more imported rice by replacing the volume restrictions with tariff.

“Even before the Law could take effect, palay prices have already gone down to as low as 114 per kilo, or 16 per kilo lower than their levels last year. If this trend continues, farmers will end up losing 175 billion in 2019 alone for the palay they sell to the local market,” the groups said in a joint statement.