Vietnam’s move to import rice to push prices of the staple in PH
The latest move of Vietnam – the Philippines’ top source for cheaper, imported rice – to import rice too may push rice prices higher on the local front, sources said.
Department of Agriculture (DA) Undersecretary Ariel Cayanan said the unprecedented decision of Vietnam, one of the world’s top rice exporters, to import rice from India will “not only have implication in the Philippines but also the entire world market.”
“90 percent of our imported rice comes from Vietnam [so definitely] the price [of the staple] will increase,” Cayanan said in a virtual press briefing.
“Aside from the Philippines, a lot of other countries also buy from Vietnam,” he added.
As of December 31, 2020, the country’s total rice imports stood at 2.07 million metric tons (MT), which is higher compared to the 1.86 million MT that entered the country in the same period in 2019, data from the Bureau of Plant Industry showed.
Of the total imports last year, 1.79 million MT came from Vietnam, making the Southeast Asian country the Philippines’ top supplier of imported rice for several years now.
In order to fulfill the country's demand, the country, through the private sector, will need to import as much as 1.69 million MT of rice this year, Cayanan said.
This is amid the target local palay production of about 20.4 million MT for the entire year, which is higher than the expected palay yield of 19.44 million MT in 2020.
For this quarter, in particular, local palay output is seen at 4.8 million MT, while about 3.9 million MT is targeted for the second quarter.
If this isn’t achieved, then the country may have to import more for this year.
“We are praying, and with the help of our stakeholders, that this output will be achieved,” Cayanan said.
For his part, Federation of Free Farmers (FFF) National Manager Raul Montemayor said he doesn't think Vietnam buying India rice means that the former will not be able to supply to the Philippines anymore.
“They will continue to sell to us since they still have a surplus, but their price will be high. Local traders could of course just import directly from India, but I think traders are not very keen on India rice because of poorer quality,” Montemayor said.
“I can only speculate that because Vietnam rice prices are high, they might be buying cheaper India rice to put less pressure on domestic prices. So they will buy cheap rice for their domestic use then export more expensive (over $100 more per ton) rice and still make money,” he added.
Overall, however, Montemayor said there seems to be a tightening of surplus stocks, with even China buying from India.
“This could signal an increase in international prices that will make imported rice more expensive here. Could be good for our local farmers, unless importers again undervalue their shipments to save on customs duties,” he further said.