PHL PURSUING P8-B G2G RICE IMPORTS FOR STABLE SUPPLY
THE Philippines will push through with its P8-billion 300,000-metric ton rice importation via government-to-government (G2G) transaction to ensure the country has sufficient stockpile amid the Covid-19 pandemic. Agriculture Secretary William D. Dar said the budget for the importation has been approved and will be handled by the Department of Trade and Industry’s Philippine International Trading Corp. (PITC). The idea for the G2G rice importation came from the DA and the National Food Authority (NFA), Dar added. Trade Secretary Ramon M. Lopez said the budget for the rice importation is P8 billion, while details of the G2G transaction are still being finalized. Dar said the DA and the NFA are providing technical advice to the PITC regarding the G2G importation since the NFA has been involved with rice importation, especially G2G, prior to deregulation of the rice industry. “The budget for the importation has been approved and has been given to DTI-PITC. They will lead the G2G arrangement. We had a meeting last week, PITC [is] now leading the G2G discussions,” Dar said in a virtual press conference on Monday. According to Dar, there are various available rice suppliers in the world market today despite the reported export suspension by certain exporters like Vietnam. “There’s a lot of supply. We have
a lot of suppliers. Even India is offering a G2G of 300,000 metric tons. Myanmar is still wide open,” he said. Since the start of the year, about 600,000 MT of rice has been imported by the private sector, while 1.3 million MT could still enter the country with all the existing sanitary and phytosanitary import clearances (SPS-IC) issued by the Bureau of Plant Industry to eligible importers, Dar added. Dar disclosed that about 400,000 MT of rice from Vietnam will arrive in the country this month following Hanoi’s assurance that it will honor existing supply contracts with Philippine importers. “We received [Vietnam’s] letter last week. Being a good trading partner, the general tone of their letter is that they would be observing the contracts that have been signed earlier,” he said. International Rice Research Institute Agri-food Policy Platform head Jean Balié said world rice market “fundamentals are robust,” indicating “no reason to expect supply problems” in the short term amid the pandemic. “The last rice harvests were good or even better than expected globally. Stocks are high and much higher than what they were in 2008 and 2011,” Balié said in an recent IRRI news statement. Citing United States Department of Agriculture estimates, Balié added that harvests from China and India are in a good position “to cover several months of consumption.” Hence, he added, “a shortage of rice is unlikely in the short run.” However, Balié flagged mediumterm issues to watch out for, such as production shocks and massive demand surge that could trigger a global price crisis. “In the medium term, any shock on production that could result in a lowerthan-expected harvest could trigger a price crisis. Likewise, a massive surge in demand fueled by panic buying and hoarding could also trigger a price rise in the medium term,” he said. “Decisions like limiting the flow of rice within and between countries, including export bans and other trade restrictions as well as excessive buying, can all precipitate a surge in rice price in spite of good market fundamentals,” he added. Based on IRRI analysis, Balié said world rice prices could spike by at least 19 percent to as high as 52 percent if exporting countries, such as Vietnam, Cambodia and India, suspend shipments. Under these scenarios the global price of Thailand 5-percent broken rice would increase to $525 per metric ton to about $671 metric ton. But under a worst-case scenario, where exporters impose a ban on shipments coupled by higher imports by China, world rice prices could shoot to $817 metric per MT. “In the worst-case scenario, rice price could spike well above the maximum level reached during the 2008 crisis,” he said. “Therefore, price is the main variable that will determine if a rice crisis is looming or already under way,” he added.