Agricultural damage caused by ‘Lando’ significant – DOF
The Philippines may have to import more rice to avoid inflationary pressures given the significant agriculture damage caused by Typhoon Lando, the Finance department said.
This would be on top of imports identified as needed to address losses from an ongoing dry spell, the department noted in its latest Economic Bulletin.
Specific import volumes were not mentioned, but the damage caused by the typhoon was expected to cause a spike in second semester rice losses.
The bulletin cited Agriculture department data showing that 360,000 metric tons (MT) of palay had been damaged as of October 20, almost all in the rice-growing Central Luzon region. Assuming a 0.65 conversion rate, the lost palay translates 234,000 tons of rice or roughly seven days of annual rice consumption, it added.
“Already, the BAS [Bureau of Agricultural Statistics] estimated in July that total rice production in the second semester of 2015 would slightly decline by 0.5 percent owing to the dry spell,” the Finance department said.
Updating this estimate to incorporate the typhoon-caused losses would mean around a 4 percent decline in total second semester production, it claimed.
“The country may have to import more rice to replace these losses in domestic production and avoid triggering an inflationary spiral,” the Finance department said, also warning that the country’s buffer stock could drop to below 50 days.
“Rice buffer of close to the September 1 level of 58 days is needed to ensure rice price stability,” it said.
The National Economic and Development Authority has said the government may have to import another 1 million MT of rice next year. This is on top of the 500,000 MT provisioned for the first quarter of 2016 and the 1.9 million MT already approved for this year.