| Infographics | Vietnam's rice exports make a breakthrough in many markets Philippines considers reducing rice import tax to reduce prices |
The report, “Grains: World Markets and Trade,” forecasts that the Philippines will import 3.8 million tons of rice in marketing year 2023-24, compared to China’s forecast of a 3.5 million tons decrease. The United States also forecasts lower global rice production through 2024.
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Global rice prices had been rising due to stronger demand and lower production, even before India announced its export ban in July, the report said. India accounts for about 40% of world trade and sent shockwaves around the world when it imposed the ban.
The Philippines has been hit hard and is now looking to boost supplies through Vietnam. Both governments are set to sign a rice trade agreement soon. Some lawmakers have complained about the Philippines’ Department of Agriculture’s “reliance” on rice imports. Farmers group Kilusang Magbubukid ng Pilipinas (KMP) said imports only exacerbate the Philippines’ “chronic problems besetting the domestic rice industry.”
KMP President Danilo Ramos said the flood of imported rice into the domestic market will not ensure cheaper prices. Ultimately, consumers will be faced with skyrocketing rice prices and unaffordability. Rice is a staple food in the Philippines, and rising prices are affecting households of all income levels. The government has imposed a temporary price cap on rice, while the Finance Ministry is proposing a lower tax rate.
Despite the bleak picture of rice supplies, the USDA says the situation is not yet as dire as it was in 2008. In 2008, the Philippines was the world’s top rice importer, but several countries imposed export restrictions at the time, driving up prices.
The USDA report noted that despite the sharp increase in export quotations, prices have not yet reached their 2008 record levels for a number of reasons. The agency attributed this to continued exports from Vietnam, India’s exemptions to the ban allowing parboiled rice exports, and small-scale government-to-government trade. To guard against the impact of El Niño, the Philippine Department of Agriculture has eyed further increases in imports through next year.
In August, Agriculture Undersecretary Mercedita Sombilla said the agency aims to import 500,000 tons of rice between November 2023 and January 2024, in the event of El Niño peaking. The El Niño phenomenon is expected to bring dry spells and is expected to impact food production and food security in the country.
Meanwhile, rice prices are expected to fall soon as the rainy season rice harvest begins in the Philippines.
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