‘Elections driving demand for low-cost rice’
THE upcoming elections and the government’s relief operations are driving the demand for low-cost imported rice, according to an industry group.
Multisector industry group Philippine Rice Industry Stakeholders Movement (Prism) noted that rice imports rose in the first quarter even before the Ukrainerusia war erupted.
The group said the current government “can ill afford” a repeat of the 2018 rice price crisis when the prices of palay and milled rice skyrocketed and caused inflation to acceleration.
“Panic buying and long queuing for rice can be disastrous for public image during election,” Prism said in a statement sent to the Businessmirror.
“The election campaigns and relief operations, however, created the demand for low-priced rice in the market that can be supplied by some countries like Myanmar.”
The country’s rice imports in the first quarter surged by almost 70 percent year-on-year to 985,139.995 metric tons (MT) as importers brought in more rice in anticipation of tighter global supply and lower domestic output (Related story: https://businessmirror.com.ph/2022/04/25/https://businessmirror.com.ph/2022/04/25/dim-outlook-fuels-phl-rice-imports-surge/).
The latest Bureau of Plant Industry (BPI) data showed rice imports during the January-to-march period were 404,057.065 MT higher than the 581,082.93 MT recorded a year ago.
In march alone, about 414,243.005 MT of rice entered the country.
BPI data showed that rice imports from January 1 to April 14 reached 1.043 MMT. Vietnam accounted for 780,772.19 MT.
Rice imports from Myanmar reached 107,888 MT, more than half of the 196,718.9 MT that the country imported from the Southeast Asian nation in 2021.
MFN tariff
PRISM said Pakistan and India have also become a vital source of low-cost rice for the Philippines due to the reduced most favored nation (MFN) tariff rate of 35 percent, which benefits exporters from outside the Asean region.
“The important issue of extending the 35 percent MFN tariff rate for the NON-ASEAN (countries) is to provide additional sources of low-priced rice from other countries like Pakistan and India,” the group said.
“For added info, broken rice is very active in global and local trading. These two countries traditionally priced their rice lower than Vietnam and Thailand.”
BPI data showed that rice imports from Pakistan and India from January 1 to April 14 have reached 70,957.5 MT and 2,775 MT, respectively. The country’s total rice imports from Pakistan last year was only at 25,286 MT while imports from India reached 3,030.060 MT.
Nonetheless, Prism, which has members across the whole rice value chain, noted that “further scrutiny” is required in extending the 35-percent MFN tariff on rice to prevent possible backlash to local rice farmers.
“The move to extend the 35 percent MFN tariff needs further scrutiny because more cheap rice in the market will definitely create a backlash to our local farmers as well.”
Continued dialogue
PRISM said the convergence of rice imports in the first quarter of this year was a request from stakeholders of the rice industry “to manage importation” during harvest this dry season.
Importers also expect the government to suspend the issuance of sanitary and phytosanitary import clearance (SPS-IC) for rice imports, according to the group.
Prism said it will continue to hold dialogues with government agencies, such as the Department of Agriculture and the BPI for the “appropriate” volume and timing of rice import arrivals “that would benefit all stakeholders, including consumers.”
“Each individual, institution or agency in the government and private sector that is involved in the rice industry will have to make a recommendation, a decision and take a position,” it said.
“And in doing so, whether we like it or not, we cannot avoid decisions that may affect other sectors involved. The process of decision making should be a dynamic but concerted effort.”