Thursday, May 23, 2024

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The prices of rice are expected to increase in 2024 due to the occurrence of El Niño during the typically low production months.


Authored by Adrian H. Halili, a journalist.

The cost of rice in the beginning of 2024 is expected to mirror the height of the El Niño drought, which aligns with the time of year when there is a shortage of the essential grain. This forecast was made by Calixto V. Chikiamco, the president of the Foundation for Economic Freedom.

In a message sent through Viber, Mr. Chikiamco stated that the expected deficiency must be prevented by increasing inventory levels.

According to Mr. Chikiamco, if there is not a sufficient supply of reserves, rice prices may rise once more.

The national meteorological agency, PAGASA (Philippine Atmospheric, Geophysical and Astronomical Services Administration), predicts that the El Niño will reach its highest point in late 2023 and early 2024.

A surge in the retail price of rice prompted President Ferdinand R. Marcos, Jr. to order price controls on Sept. 5. He fi

The highest cost for regular-milled rice is now P41 per kilogram, and P45 for well-milled rice.

Mr. Chikiamco stated that the price controls, which were removed on Wednesday, were not viable as they resulted in traders halting the importation of rice.

“The imposition of a price ceiling resulted in traders stopping their imports, potentially leading to a temporary decrease in the availability of rice. It also led to a decrease in the price that traders were willing to pay farmers for palay (unmilled rice),” he explained.

Former Secretary of Agriculture William D. Dar stated that implementing further price controls should not be the solution when prices increase again.

Mr. Dar suggested in a text message that instead of reinstating price caps, it would be more effective to lower the current tariff to 10%. This could result in a significant decrease in rice prices, but it should only be implemented as a temporary solution.

Secretary of Agriculture Mr. Marcos rejected the proposal to temporarily decrease tariffs on imported rice, citing the anticipated decline in global rice prices.

According to Mr. Dar, the government should persist in enacting strategies to stabilize the cost of rice.

Mr. Dar stated that it is essential for the government to ensure that there is a sufficient amount of inventory available to households, commercial traders, and the National Food Authority (NFA).

According to the Philippine Statistics Authority, the national rice supply decreased by 11.3% compared to the previous year, reaching 1.8 million metric tons as of early July.

Commercial establishments held 984.76 thousand metric tons in inventory, households held 771.93 thousand metric tons, and NFA warehouses held 60.84 thousand metric tons.

Mr. Dar emphasized the need for NFA to acquire and expand its reserve supply by purchasing from domestic sources.

Last month, the NFA Council established a revised buying rate of P19-P23 per kilo for dry palay and P16-P19 per kilo for wet palay. This marks an increase from the previous price of P16 per kilo for wet palay and P19 per kilo for dry palay.