The Market Monitor Minding the Nation's Business
By Rose de la Cruz
Though officials of the Marcos administration announced an easing of inflation in January 2024, it could not dismiss its headache – elevated rice inflation reaching 22.6% last January from 19.6% the month prior.
This is because of the continuing rice prices around the globe, caused by fears of a supply lack due to El Nino and the continuing geopolitical uncertainties around the world.
National Statistician and Philippine Statistics Authority head, Claire Dennis Map said the rate of increase in the price of rice last month was highest in 14 years, when rice inflation increased to 19.6% from 15.8% in November, making it the fastest rice inflation since March 2009 (which was at 22.9%), said a report from the Daily Tribune.
But this is also because world market prices for the staple are high, he noted.
Mapa added that the PSA tracked the movements in average prices of three sub-rice groups: regular-milled, well-milled, and special rice.
The average price of regular-milled rice last month was P49.65 (compared to its price in December of P48.48 per kilogram (up by 2.4% within a month) and P39.65 more per kg more than in January 2023), or up by 24.3%.
Well milled rice sold for P54.91 per kg in January, up from P43.92 in the same month of 2023, or an increase of 25% year on year.
For well-milled rice, the PSA official said it was registered at P54.91 per kilo last month, higher compared to P43.92 per kilo in the same month last year, recording a 25% year-on-year and for December, the average cost of well-milled was P53.82, up by 2% month on month.
The average price of special rice in January was P63.90 per kilo,up from P53.76 in January 2023 or an increase of 18.9% year on year and from P63.8 per kg in December 2023 or by 1.3% more..
Mapa said the Department of Agriculture foresees higher global rice prices in the coming months because of fear of the impact of El Nino on rice supplies and a continuing geopolitical uncertainty.
“Our expectation is [that] we will have rice inflation in the vicinity of 20% or higher until July,” Mapa told reporters..
The country’s headline inflation was reported to slow down to 2.8% last month—the lowest inflation rate since October 2020, when it was recorded at 2.3%.
In the 2.8% overall inflation rate, rice contributed 1.3 percentage points, said Mapa.
Mapa’s boss, Socioeconomic Planning Secretary Arsenio Balisacan said the administration is observing with hawk eyes the rice prices to provide policy recommendations to President Marcos to ensure stable and affordable food prices. This, by allowing the imports of certain commodities to stabilize supply.
The Bangko Sentral ng Pilipinas has projected that lower prices of vegetables and sugar would lead to downward price pressure but that higher prices of rice, meat, fruits, fish and petroleum (which could elevate electricity, water and transport costs) could drive up inflation.