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THE
Philippine government is eyeing the reduction of
existing tariffs on rice and corn as a way of helping
reduce the price of these commodities when sold in the
local market.
Currently, imported rice and corn are both slapped a
duty of 40 percent.
“Now
maybe an opportune time to study the impact of lowering
the tariffs on rice and corn,” said Agriculture
Secretary Arthur Yap at the sidelines of Donors’ Forum
held in
Manila recently.
Yap said
the reduction in tariffs will be “studied carefully”
with other stakeholders in the industry.
On the
revenue-generation side,
Yap noted that importing the commodities may already be “revenue
neutral” since the National Food Authority (NFA) is
seeking tax subsidies for importing the grains.
The move
is expected to temper the increases in the price of the
grains, particularly of rice at the retail level.
Based on
the latest monitor of the Bureau of Agricultural
Statistics (BAS) under the Department of Agriculture
(DA), the retail price of regular milled rice is now at
P26 per kilogram. Just two years ago, the price hovered
to between P21 to 22 a kilo.
The DA
through the NFA is looking to import as much as 2.1
million metric tons (MMT) to fill the production
shortfall and to stockpile for the lean months of July,
August and September.
Last
week the NFA tendered 550,000 metric tons (MT) of rice
but the 10 bidders managed to offer a combined volume of
only 335,500 MT.
Because
supply of the grain is tight, the spot price of rice in
last week’s auction went up by 50 percent to more than
$600 per MT, from the $475 per MT offered in a tender
last January.
As for
corn, traders and end-users themselves have admitted
that they are wary of importing the commodity because
its landed cost is almost comparable to that in the
domestic market.
Supplies
of rice and corn in the international market are
currently tight with prices soaring at unprecedented
levels.
Yap said
the Philippine government did not expect supply to
tighten up this year as projections by economists point
to the possibility that a possible shortage may happen
five to 12 years from now.
“But, it
seems apparent that supply is already dwindling as
demand continues to rise, forcing prices to increase,”
he said.
In
November, the United States Department of Agriculture
said the price of imported rice is expected to remain
high in 2008, as ending stocks are projected to be the
smallest in 25 years.
Aside
from small stocks, the rising cost of production,
coupled with the increase in global demand for rice will
continue to push the price of the grain higher. |
