The World Bank is closely monitoring the impact on rice of the severe floods in Thailand because catastrophes like these can cause an uptick in prices worldwide.
In a briefing on Thursday, WB President Robert Zoellick said he hopes the Philippines would be able to manage its resources well despite being one of the world’s largest importers of milled rice.
Thailand is a major source of rice imports for the Philippines. The National Food Authority (NFA) estimated that the floods in Thailand destroyed around 3.5 million metric tons (MMT) of paddy rice and caused prices in the international market to go up.
“We’ve been monitoring this very closely because we were one of the first international institutions in 2008 to warn of the dangers of higher food prices,” Zoellick said. “We still don’t know how much production is lost due to these terrible floods so we have to watch all these conditions quite carefully but for now I’m hoping the Philippines will be able to avoid certain problems it encountered some years ago.”
However, Zoellick said the Philippine government assured him the country has significant rice stocks. This will help stabilize prices locally and internationally, since the country is a major rice importer.
He also said other major rice-producing countries like Vietnam reported a positive outlook, while India has lifted some of its bans and has entered the international market. These will be able to temper any price spikes that could result from the flooding in Thailand.
Zoellick said the global food index has already increased by 18 percent to 20 percent as a result of various pressures worldwide. However, there has already been a slowdown in the past two months, which could be sustained despite the floods.
“This is the subject I discussed with the President and the economic team. I think the good news is the Philippines has significant rice stocks. The expectations for the harvest reserve to be able to add to those stocks are encouraging [and could contribute to] increased production that the government has been seeking in the Philippines,” Zoellick said.
Earlier, NFA Administrator Lito Banayo said the NFA Council will look into the possibility of reducing the rice-import allocation for the private sector next year due to the floods in Thailand.
Banayo said the increasing price of rice in the international market due to the Thailand floods could encourage unscrupulous traders to take advantage of the situation.
In 2011 the Philippines imported 860,000 metric tons (MT) of milled rice. Of this, 660,000 MT were allocated to the private sector. The remaining 200,000 MT were imported by the NFA.
Meanwhile, Malacañang said on Thursday the latest Social Weather Stations (SWS) survey results showing a higher level of hunger incidence in the country may be due to higher food prices and the storms that hit the country, which hindered the transportation of food supply in some areas.
Secretary Ramon Carandang of the Presidential Communications Development and Strategic Planning Office said the government expects hunger levels to ease once the food supply situation normalizes.
According to the latest SWS survey, 21.5 percent, or about 4.3 million families in the country, experienced having nothing to eat in the last three months, up from 15.1 percent in June.
Carandang cited two reasons for the higher hunger numbers—rising prices of commodities in the world market, which caused local food prices to go up; and recent typhoons that have a temporary impact on food prices.
“We think that higher food prices are among the main factors for higher hunger figures. We think that those factors are temporary. Once the transportation of food supplies normalize and commodity prices go down, food prices would also normalize,” he said.
(With Mia Gonzalez)
In Photo: World Bank Group President Robert B. Zoellick, on a two-day visit to Manila, gestures during a press conference at the World Bank office in Ortigas Center, Pasig City, on Thursday. (By Nonoy Lacza)
