The Philippines may import an additional 1 million metric tons (MMT) of rice next year to plug the projected steep fall in rice output due to El Niño.
The National Economic and Development Authority (Neda), chair of the interagency Food Security Committee on Rice, said rice output between 2015 and 2016 may decline by 25 percent.
“Based on our analysis of the current data, we may need to import another 1 MMT to maintain a 45-day buffer stock. If you don’t, the inventory will fall drastically and as you have seen in 2013 and 2014, when the inventory drops, prices [increase],” Economic Planning Secretary Arsenio M. Balisacan told reporters late on Monday.
“Our assumption is that deceleration [of output] is going to be as bad as the 1997-1998 [El Niño]. If that’s the case, rice production is going to fall 25 percent,” Balisacan added.
He said the purchase of 1 MMT of rice from abroad was proposed by the El Niño task force and has not been approved by the National Food Authority (NFA) Council.
Should the NFA Council approve the additional importation of rice, the government may ask the private sector to bring in half of the volume under the minimum access volume (MAV) scheme of the World Trade Organization.
The government is racing to stockpile rice to avoid buying from the world market at a time when prices have already gone up due to higher demand from other countries.
“If it will hold true, one option is to bring in at least 50 percent of the MAV or they could bring [the entire 1 MMT], but that’s a private sector decision. You can offer it, but if they don’t bring it in the time or months that you need them, that might not help. In the meantime, the government to government procurement can do that. So the remainder of that 1 million, after the MAV, will be imported by the NFA directly,” Balisacan said.
The Philippines has already frontloaded the importation of 500,000 MT for 2016 of rice that is scheduled to arrive before the end of March next year.
For this year, Manila has allowed the purchase of as much as 1.92 MMT of rice from other countries. Neda figures showed that 840,000 MT of imported rice have already arrived as of end-June.
Neda also said some 232,000 MT of rice should have arrived in the country as of end-September. The remaining tranche of 850,000 MT would arrive before the end of December.
The Philippine Statistics Authority (PSA) earlier projected the country’s paddy-rice output would fall short of the government’s target this year.
The PSA said palay production may only reach 18.86 MMT in 2015. This is 1.22-MMT short of the national target of 20.08 MMT, and 0.6 percent lower than the 18.97-MMT output in 2014.
The statistics agency said the reduction in unmilled-rice output may be due to the decline in planting intentions as a result of delayed and inadequate release of irrigation water and the prolonged dry spell.