The Market Monitor Minding the Nation's Business
By Rose de la Cruz
First, the Marcos administration clinched a five-year rice supply deal with Vietnam, now our top supplier of the staple, last January
Next the Department of Agriculture negotiated for a rice deal with India and Cambodia and now with Pakistan, which it hopes to finalize by June next year.
The message is clear: the DA is not serious about raising our local paddy production but would rather choose the more expensive but most convenient import path—which obviously promises to be worth something for everybody but not for the farmers and consumers.
Last January, the President signed with Vietnam during his state visit there a memorandum of understanding for the 5-year supply of 1.5 to 2 million metric tons per year “at competitive and affordable prices.” He was with with DA Secretary Francisco Tiu Laurel Jr.
And then on March 4, he announced the Philippines’ interest to renew rice import deals with Cambodia as it braces the effects of El Nino on the country’s food supply. “Some MOUs that have lapsed, we need to look back and engage with in terms of trade in agriculture, rice specifically,” he said during a bilateral meeting in Melbourne with Cambodian Prime Minister Hun Manet. Marcos visited Cambodia in 2022 during the 40th and 41st ASEAN summits.
Citing the 2024 rice supply and demand outlook, the PCO said rice supply in the Philippines would be stable until the end of the year with an annual average surplus of 3.7 million metric tons or 99 days of buffer or days to last.
And then on December 18, Laurel said the DA is in talks with envoys from Pakistan and India to get commitments for the supply of 2 MMT of rice to meet the Philippines’ import requirements, if needed.
Laurel met with Pakistani Ambassador Imtiaz Ahmad Kazi to finalize a memorandum of understanding, under which the South Asian country would allocate for the Philippines up to one million metric tons of rice annually, according to the DA. Similar negotiations are being held with India.
“The intention is to create a level playing field among our rice supplying nations and we want them to compete for our market,” Laurel stressed.
The prospective supply deals align with President Marcos’ goal of diversifying the country’s rice sources and reducing the cost of the staple, making it more affordable for consumers, according to the DA.
Currently, Vietnam is the Philippines’ primary rice supplier, accounting for at least 75 percent of annual import volume.
In January, the Philippines and Vietnam signed an agreement for a five-year rice quota of 1.5 million to two million metric tons, the DA said.
Last month, Kazi disclosed that Pakistan wants to increase its share in the Philippines’ rice market by forging a bilateral memorandum of agreement with the government.
Kazi said the South Asian country stands ready to expand its rice exports to the country to as much as one million MT.
“We want to increase that share, provided we can also provide a stable, good supply of rice. And that depends on mutual conditions for each other, which means that the Philippines should guarantee us that they want this much rice every year,” he said.
Under a memorandum of agreement, Kazi said Pakistan would have a guarantee of the volume that would enter the country in a given year.
The idea of forging a MOA between Manila and Islamabad came up last year during initial talks between the foreign ministers of the two countries, Kazi added.
Rice imports as of December 12 stood at almost 4.5 MMT with Vietnam as top supplier at 3.43 MMT, followed by Thailand and Pakistan at 567,913 MT and 244,859 MT, respectively.
On December 18, the papers reported that the Philippines is negotiating with Pakistan and India for rice supply of 2 MMT combined. The DA plans to sign an MOU with the two countries soon.