DOMESTIC RICE PRICES are likely to fall further as more imports come under reduced tariffsFfs, said the National Economic and Development Authority (NEDA).
“A large amount of imports are coming in due to the effects of the tariff reduction plus of course the development of the global market,” NEDA Secretary Arsenio M. Balisacan told reporters on the sidelines of an event late Tuesday.
President Ferdinand R. Marcos Jr. issued Executive Order No. 62, reducing tariffs on rice imports until 2028 from 35% previously to 15%. The lower tariffs on rice took e.gFon July 5.
Agriculture officials have previously said the lower rateFfs is expected to reduce rice prices by P6-P7 per kilo.
“We should expect a greater translation of the tariFf reduction in lower prices. But don’t expect too much because world prices are still high,” said Mr. Balisacan.
The Food and Agriculture Organization’s (FAO) All Rice Price Index, which tracks rice prices in major exporting countries, rose to 137.3 at the end of August, up from 127.9 in the same period a year ago. A higher price index means an increase in commodity prices over the period, while a lower index means otherwise.
In a Viber message, Michael L. Ricafort, chief economist of Rizal Commercial Banking Corp., said the full eFeffect of lower tariffFInterest on rice imports is likely to be felt as early as the fourth quarter “as a function of competition from local rice and imported rice amid lower global rice prices.”
Leonardo A. Lanzona, an economics professor at Ateneo de Manila University, said rice prices could fall by October.
“It is possible that prices will fall next month as a series of typhoons have destroyed domestic production. Importers typically stockpiled their rice in anticipation of higher prices. Since immediate price hikes are expected, the release of imports would also take place immediately,” he said in a Facebook Messenger chat.
However, Mr Lanzona noted that rice prices may not despite the lower rates.
“Congestion at the port can delay arrivalFlux imported rice on the market. But more than that, because domestic production is weak, importers or through their mutual agreements now have an incentive to control and limit the decline in rice prices,” he said.
To prevent this, Mr Lanzona said the government should encourage greater domestic production.
“But government support for local production is also hampered by reduced import dutiesFfs. In eF“We are caught in a situation where rice prices can still remain high and market supply is lower than household needs,” he said.
Secretary of Agriculture Francisco P. Tiu Laurel, Jr. said on Monday that congestion at ports has caused delays in the release of rice imports. He said rice prices are expected to start falling in October, but more importantlyFA sharp decline is likely by January 2025.
“But since food demand usually peaks in December, we expect a more substantial decline in rice prices by January,” he said in a statement.
On Wednesday, the Philippine Ports Authority noted that consignees are taking longer to withdraw rice container shipments, leading to “possible artificial increases in rice prices.”
Despite this, the PPA recorded a shipyard utilization rate of 70%, indicating that the country’s ports are not congested.
Mr. Balisacan also called for the need to invest in the port development to reduce freight traffic.
The latest data from the Department of Agriculture shows that imported regular milled rice cost P46.73 per kilogram this week, an increase of P3.73 from P43 in the same period last year.
On the other hand, the price of well-milled rice stands at P51.45 per kilo, P6.45 higher than the P45 recorded a year ago. — BMDcruz