The European Union may steal the Philippines' title as the biggest rice importer in the world this year as the Southeast Asian nation is bent on achieving higher local palay production amid stricter import permit issuance.
“The Philippines is forecast to fall to the number two spot in 2021 as the largest global rice importer after the European Union,” the US Department of Agriculture (USDA) said in its latest Global Agricultural Information Network (GAIN) report.
The GAIN report said it is the improved palay production, government policies that constrain trade, and record-high prices from traditional suppliers that will be “key factors limiting imports this year”.
EU is expected to import 2.45 million metric tons (MT) of rice this year, while the forecast for the Philippines has been reduced to only 2.3 million MT from the earlier outlook of 2.6 million MT.
It was in 2019 when the Philippines became the largest rice importer in the world, with commitments to purchase 2.9 million MT of the staple abroad. This is following the removal of quantitative restrictions on its imports, which was a result of the implementation of the Rice Tariffication Law (RTL).
Though the country kept its status in 2020, its expected rice imports also slightly declined to 2.3 million MT amid higher production, government interventions, and high prices from its traditional suppliers.
“Production within the Philippines is estimated to be larger in 2020/21, rising slightly to 12.0 million tons on higher area and yields. The Philippines Department of Agriculture is implementing programs to boost production through better quality seeds, machinery, farm credit, and extension through the Rice Competitiveness Enhancement Fund,” USDA said.
“Although no longer maintaining quantitative restrictions, the government has maintained a role in regulating trade by implementing policies related to importing licensing and the timing of license distribution,” it added.
To recall, the Philippine government has slowed the distribution of sanitary and phytosanitary (SPS) import clearances in recent months, which in turn has slowed import pace in the first half of the marketing year compared to the previous year.
High export prices for Thailand and Vietnam rice are also lessening rice purchases by the Philippines.
Primary rice exporters to the Philippines are from ASEAN partners since they face lower import tariffs compared to other countries. Typically, Thailand and Vietnam are the largest suppliers to the Philippines due to their proximity and competitive prices.
Both Thailand and Vietnam had drought reduced rice crops in 2019/20 that continue to limit exportable supplies at the beginning of 2020/21.
The other day, Agriculture Undersecretary Ariel Cayanan said that in order to fulfill the country's rice demand, the Philippines, through the private sector, will need to import only 1.69 million MT of rice this year.
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, Cayanan said.