A year after the rice trade liberalization (RTL) law took effect, Manila said it is targeting to maintain imports at around 1.6 million metric tons (MMT)—the estimated shortfall in local output—to stabilize the farm-gate price of the staple

A year after the rice trade liberalization (RTL) law took effect, Manila said it is targeting to maintain imports at around 1.6 million metric tons (MMT)—the estimated shortfall in local output—to stabilize the farm-gate price of the staple.

Agriculture Secretary William D. Dar said the country’s rice production is capable of supplying only 85 percent to 87 percent of the requirements of Filipino consumers.

“That’s the direction [to keep imports at that level]. Managing importation and enhancing local productivity equals better opportunity for rice farmers, and they are more productive and competitive and they have higher income,” Dar told reporters in an interview at the sidelines of the government’s celebration of the anniversary of the RTL law.

The Department of Agriculture (DA) is aiming to hike local palay production to a record-high 19.6 MMT this year via the interventions bankrolled by the Rice Competitiveness Enhancement Fund (RCEF) created by the RTL law.

The law deregulated the local rice industry and eased import rules to increase the supply of the staple and make it more affordable.

Dar also said the tightness in global rice supply due to the decline in the output of Thailand and Vietnam is an “opportunity” for local palay prices to recover. Thailand and Vietnam are currently grappling with the ill effects of a severe El Niño on their farms.

He said the government expects the arrival of rice imports to decline during harvest this month after the DA invalidated thousands of sanitary and phytosanitary import clearance (SPS-IC) that were unused since last year.

“As what we have been saying, it is managing the balance between enhancing productivity and competitiveness, and once you have some idea then you can target your importation,” said Dar.

Dar noted that the nationwide rice stocks are good for 80 days. “After this main harvest we will open up the importation again during the rainy days starting June to ensure we have sufficient supply.”

Appeal
Rice industry traders and importers told the BusinessMirror that the DA, through the Bureau of Plant Industry, which oversees rice importation, has appealed to them in a recent dialogue to cut or if possible, totally stop buying imported rice during harvest.

However, a trader noted that everything will be “business as usual” for them since their operations depend on importing the staple unless the government will again stop issuing SPS-ICs. The government stopped issuing SPS-ICs in September and October last year.

“We don’t over-purchase we just bring in whatever is the demand of our buyers,” a Manila-based trader told the BusinessMirror.

Another trader based in Metro Manila told the BusinessMirror that rice imports have been declining due to lower demand. This could cause the high carry-over stocks to increase further after harvest.

“There are reports in Vietnam that the Philippines will stop issuing SPS-IC. What can we do if [Manila will] stop issuing it?” the trader said.

Data from the Philippine Statistics Authority obtained by the BusinessMirror indicated that the country imported 2.76 MMT of rice last year, 38 percent higher than the nearly 2 MMT recorded in 2018.

PSA data also showed that the value of crops production, which accounted for 50.6 percent of total farm output, fell slightly to P402.894 billion in 2019 from P406.119 billion in 2018.

Despite a 5-percent expansion in the fourth quarter, total unmilled rice output in 2019 declined by 1.3 percent due to a series of contractions in the previous quarters.

Total palay output fell to a three-year low of 18.814 MMT, PSA data showed.

The government said the typhoons that struck the country in December had reduced the production of rice and other crops.