PH rice imports may hit 2.1M MT this year

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THE Philippines’ rice imports could reach as much as 2.1 million metric tons (MT) this year, the biggest volume under the Aquino Administration and roughly the same level as in the 2008 global rice crisis, once the government approves the terms of a new trade concession with the World Trade Organization (WTO).

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But Presidential Assistant on Food Security and Modernization (PAFSAM) Secretary Francis Pangilinan, who is also the chairman of the National Food Authority (NFA) Council, said that the government has yet to finalize the terms of the new trade concession.

The new concession under the so-called minimum access volume (MAV) gives other rice producing nations market access to about 805,200 MT of rice that the Philippines imports annually.

The new trade commitment was supposed to take effect last year.

With the approved rice imports by the government now hitting 1.3 million MT, the additional volume under the so-called MAV could send the total Philippines’ rice imports to 2.1 million MT this year.

“The MAV decision is still being finalized,” Pangilinan said when asked if the NFA had already adopted the approved MAV on rice.

Special treatment in WTO
Rice is a commodity that has direct linkages to food security, livelihood security and the rural development needs of millions in developing countries like the Philippines.

At present, rice is the only commodity in the Philippines that enjoys special treatment in the WTO, which excluded the same from agriculture liberalization.

Unlike other agricultural products, rice, which is the basic staple grain of the Philippines, was not tariffied. Instead, rice farmers were protected through the imposition of a quantitative restriction, which allows only a limited volume of the grain to enter the country.

MAV refers to the minimum volume of farm produce allowed to enter the Philippines at a reduced tariff of 35 percent, while shipments outside MAV pay higher rates of 50 percent and would need approval by the NFA.

Of the total MAV volume, some 755,000MT will be country-specific- quota or CSQ (with Vietnam and Thailand getting the bulk), while the remaining 50,000 MT will be omnibus volume.

Before, the Philippines only allowed 350,000 MT of rice imports, of which 163,000 MT were allotted for CSQ and 187,000 MT for omnibus volume that can be accessed from any country.

Manila has historically allowed private sector importation for rice requirement under MAV.

G2G rice imports
But there will be no private sector participation in the procurement of Manila’s buffer rice requirement as the NFA has opted to conduct a government-to-government bidding.

In a statement issued Friday, the NFA Said that only countries with existing executive agreements with the Philippines would be allowed to join the G2G tender for the supply of the initial volume of 250,000 metric tons of rice, which will serve as buffer stocks during the lean months.

“The governments of Vietnam, Thailand and Cambodia will be invited to participate in the G2G procurement,” the agency said.

The NFA also said that it plans to buy well-milled long grain white rice at 25 percent brokens.

The interagency Food Security Committee earlier approved the importation of another 500,000 metric tons of rice this year on expectations that local palay (paddy rice) production will fall short of target.

It also arrived at the decision as rice stocks at government depositors also fell below the required volume of at least 15-days’ buffer stock at any given time, and 30-days’ buffer stock during lean months.

The NFA said that the importation of 250,000 MT is part of the preparation for the lean months beginning June and to stabilize rice prices, while the remaining 250,000 MT is on standby in case there will be significant effects on production brought by El Niño.

The Food Security Committee is chaired by the National Economic Development Authority, with the Department of Trade and Industry, Department of Finance, Philippine Atmospheric Geophysical and Astronomic Services Administration, Philippine Statistics Authority, Bangko Sentral ng Pilipinas, National Irrigation Administration, Department of Agriculture, and the NFA as its members.

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2 Comments

  1. Philippine Rice Self Sufficiency – a great topic to discuss in order to pass the time. Although theoretically possible, only the consumer is hoping for this delusion. Why? It is important to maintain a high farm gate price due to the inefficiency of the Philippine farmer. At P17/kg, the farm gate price for palay is almost the break even point for most farmers, as it provides just enough capital for them to continue farming. At a farm gate price of P17/kg, the wholesale price of milled rice would be about P27. Thailand 15% broken sells for P17 F.O.B., so this provides a huge price differential for the rice smugglers that bring in on average 500 million tonnes of milled rice. Guess who benefits from rice smuggling? We know the answer to that. The result is that for the past 130 years, the Philippine consumer has paid higher than world market rates for rice. The system has been broken in the Philippines so long, no one can remember when things worked right. Exercise your vote next May to end this injustice.

  2. No one seems to be talking about ‘rice self-sufficiency’ anymore. It was all a fairy tale, anyway. To cover up for massive rice smuggling masterminded by the DA secretary himself.