Rice imports down on MSRP jolt, local gains
The Department of Agriculture (DA) said importers have reduced their overseas rice purchases in anticipation of a better local harvest, but a group also believes a recent decision to put a price cap on imports could have alarmed businessmen.
Rice imports that entered the country totaled 640,915.708 metric tons (MT) as of March 13, data from the Bureau of Plant Industry (BPI) showed.
The volume was almost 46 percent lower than the 1.19 million MT of imported rice bought by traders between January and March last year.
“This means that a large volume of imported rice entered the country last year, plus the expectation that this year’s harvest will improve. We can see that importation is adjusting,” Agriculture Assistant Secretary Arnel de Mesa said in an interview on Wednesday.
Federation of Free Farmers national manager Raul Montemayor attributed the slowdown to importers backpedaling after the DA set the maximum suggested retail price (MSRP) for imported rice.
The agency introduced the MSRP for imported premium rice on Jan. 20 as one of its strategies to lower retail prices of the staple food. It hinted at lowering the price ceiling to P45 per kilogram by end-March from the current P49 per kg depending on market conditions.
“The declaration of a food security emergency could have also spooked importers because under the [Anti-Agricultural Economic Sabotage Act], the government can embargo stocks on the mere suspicion of smuggling, hoarding or profiteering,” Montemayor told the Inquirer in a Viber message.
“There could also be residual stocks from 2024 imports,” he added. The country’s rice imports peaked at 4.8 million MT last year, up by 33.3 percent from 3.6 million MT in 2023.
Vietnam remains the leading source of imported rice, accounting for more than one-third of the total. Pakistan and Thailand came next with a market share of about 10 percent each.
Montemayor, however, sees rice imports declining this year, although he said it would remain at the 4 million MT level.
“Demand is still outpacing local production, thus requiring imports,” he added.
Samarendu Mohanty, Asia regional director at International Potato Center, said the Philippines’ import requirements have become more predictable and rational, adding that “price speculation has diminished across the region.”
Mohanty, an Indian-American agricultural economist, highlighted the Philippines’ price cap and India’s decision to lift rice export restrictions that resulted in world rice prices decreasing by 18 percent after reaching recent record highs.
“These concurrent policy changes created a perfect storm that ultimately stabilized and transformed rice markets worldwide,” Mohanty said.
He also said the country’s approach of targeting unnecessary artificial demand fueled by speculation and hoarding created a ripple effect across rice markets in Asia.
“The Philippines had long struggled with rice price volatility, with urban consumers often paying significant premiums due to supply chain inefficiencies and market manipulation,” he added.
