The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Despite earlier protestations of the Department of Agriculture on the rice import projections of the US Department of Agriculture of 4.9 million metric tons in 2024, actual arrivals as of mid-October already hit 3.4 MMT or 95 percent of actual shipments of 3.61 MMT in 2023.
Clearly, at this rate, the numbers suggest that by end of 2024 we will approach the USDA’s import projection and surpass by a hefty amount our own DA’s projections.
That is the actual problem with making ‘modest or conservative’ projections, to save face and make it appear to the public that our local DA still supports the Filipino rice farmers when in reality they want the easy way to their food security goals through importations.
Data from the Bureau of Plant Industry– regulator of grains imports and other plant imports (like vegetables) by issuing sanitary and phytosanitary import clearances– showed that rice arrivals from January 1 to October 10 hit 3.43 MMT.
Agriculture Assistant Secretary Arnel de Mesa earlier said that since rice shipments tend to pick up during the last quarter, it would be possible to surpass the total imports recorded in the previous year, Business Mirror reported.
Rice shipments in August and September rose to nearly 400,000 metric tons (MT), which was the average arrival from the first semester, based on BPI data.
This, after shipments in July slowed to 167,407.26 MT following the issuance of Executive Order (EO) 62, which lowered the tariffs to 15 percent and took effect in the same month.
Of the volume that arrived in the Philippines, BPI data showed that over 2.72 MMT came from Vietnam, which maintained its status as the country’s top source of imports. Thailand was the second-largest supplier as it accounted for 435,112.28 MT.
India, the world’s largest exporter, recently lifted its ban on non-basmati white rice shipments and set a minimum export price (MEP) of $490 per MT.
Grains insiders said India’s easing of its export restrictions could affect world and domestic rice prices.
It could also open the country to an alternative source of imported rice, considering its lower quotation on the commodity in contrast with other exporting countries.
“Considering that it is cheaper compared to Vietnam and Thailand, it can be an option for additional rice supply and import diversification,” University of Asia and the Pacific’s Center for Food and Agribusiness (CFA) Executive Director Marie Annette Galvez-Dacul said.
However, the volume of rice shipments as of October 10 is less than half of what was covered by the sanitary and phytosanitary import clearances (SPSICs) issued by the BPI.
The BPI approved and issued 7,995 SPSICs for the purchase of 7.9 MMT of imported rice.
Rice importers are required to secure an SPSIC from the BPI before bringing in foreign rice stocks. This would certify that an inbound shipment is safe for human and animal consumption, and would not bring in any pests that could be detrimental to the local agriculture sector.
Agriculture Secretary Francisco Tiu Laurel Jr. said a number of factors would account for the non-use of the import clearances issued by the government.
For one, the lack of ships and tropical storms discouraged traders who will have to comply with the government directive to bring in rice within a prescribed period.
“When there is news that tariffs will decline, importers put on hold their importation plans. So, they reapply after their SPSICs expire,” Laurel told Business Mirror.
He explained that “when there was a tender from Indonesia and Malaysia. There were Vietnamese suppliers who canceled contracts to try to get a better price, so traders were not able to use their SPSICs.”
Since rice is liberalized, Laurel said the DA can’t stop anyone from applying for an import permit.
My guess is, beginning December until May import permits would be given out liberally because politicians and those running for public office will lobby hard at BPI to grant them import clearances so they can raise campaign funds (to also buy votes in their favor).