PH rice imports to increase to 3.3 million MT in 2020

Published March 27, 2020, 12:00 AM

by manilabulletin_admin

By Madelaine B. Miraflor

The Philippines’ rice imports may go higher than expected at 3.3 million metric tons (MT) and will continue to flood the local market throughout this year despite the government’s effort to restrict permit issuance.

This, as the impact of farmers shifting to other crops is expected to be more apparent towards the latter part of the year.

At the same time, interventions being done by the Philippine government to ease the impact of Rice Tarrification Law on local production make take more time than expected.

Based on its latest Global Agricultural Information Network (GAIN) report, US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) here in Manila estimated that the Philippines is likely to import as much as 3.3 million of rice for the current market year (MY), more than 20 percent of the 2.76 million MT of imported rice the country had purchased last year.

This is also higher than USDA’s earlier forecast for this year, which indicated that Philippines may import only as much as 2.7 million MT of rice.

The GAIN report said that a year after passage of the Rice Tariffication Law, which removed the quantitative restrictions and most government controls on rice imports, Philippine rice farmers still “struggle to compete with affordable imports from Southeast Asia”.

“Although the Philippine government has used strict enforcement of Sanitary and Phytosanitary Import Permits to manage trade during the harvest season, Post [FAS Manila] forecasts that MY 2020 to 2021 rice imports will rise to offset the expected decline in local production,” the GAIN report said.

“Some farmers are likely to shift to other crops, whereas others continue the trend of converting lands to other commercial purposes,” it added.

Farmers’ decision to abandon rice farming and shift to other crops is a result of the continuous decline in the price of locally produced palay, which was triggered by the influx of imported rice. A data from the Philippine Statistics Authority (PSA) showed that as of the fifth week of February, the average farmgate price of palay stood at ₱16.8 per kilogram (/kg), lower by 16.5 percent com¬pared to the ₱19.38/kg price level recorded during the same period last year.

The GAIN report also said that the interventions from the Rice Competitiveness Enhancement Fund (RCEF) provided by RTL, which is meant to make the local industry more competitive, are “likely to take more time than anticipated”, as the Philippine government is still not yet done addressing longstanding and structural factors affecting Philippine competitiveness.