Rice price hikes in domestic markets not exclusive to PH
RICE IS a highly sensitive issue! The so-called rice crisis in May 2008 was a case in point—unnecessary long queues and “overimportation” of some 2 million metric tons (MT) of rice. With Tropical Storms “Ondoy” and “Pepeng” in late 2009, it took more than 12 months to deliver 2.4 million MT of rice imports. The National Food Authority (NFA) had to lease more warehouses as existing ones were bulging with unsold stocks and possibly rotten, aging stocks. The much-floated “rice crisis” in 2010 only led to international rice quotes settling at about half our acquisition cost. Only legitimate Filipino farmers raised hell as domestic palay’s buying price remained low.
Lately, the upward movement in rice retail prices for regular-milled and well-milled rice during the lean months hogged the headlines. And as in the past, NFA and Department of Agriculture officials were “bruised” on their faces. But this time the issue of possible shortages and skyrocketing prices appears to have been negated.
The rise in retail prices could be attributed to a number of factors: delays in palay harvests, likely rice “hoarding,” reduced “smuggling,” hike in palay farm-gate prices, reduced importation to less than 10 percent of prior years’ volume, and the early second quarter arrival of imports leaving stocks’ sufficiency to speculation in the lean months. Unfortunately, critics were not only vague but mixed in resolving the controversy.
But as a consolation to us, rice price hikes in domestic markets were not confined to the Philippines. Based on latest available August 2013 data from the Food and Agriculture Organization versus August 2012 levels (in percentages): China (4); Indonesia (5); Cambodia (6); Burma (14); Bangladesh (16); India (2 to 9); Philippines (6) and (7) for well-milled and regular-milled rice, respectively (from the Bureau of Agricultural Statistics).
Vietnam’s domestic prices remained lower by 6 percent as well as Thailand’s, “reflecting the sell-off of government stocks.”
Forthcoming updated production statistics may show if retail prices should soften in the coming months. Otherwise importation for buffer stock at current low international quotes may be justified.