MANILA, Philippines — The price of rice is expected to start declining by October due to the reduction of import tariffs, the Department of Agriculture (DA) Secretary Francisco Tiu Laurel Jr. said on Wednesday.
Tiu Laurel however noted that the full impact of the price decline due to tariff cuts may be felt by January 2025. The agriculture secretary said that it has not yet fully materialized since rice traders bulked up on imports to anticipate a rice supply shortage due to El Niño.
“Since demand for food usually spikes in December, we anticipate seeing a more substantial drop in rice prices by January,” Tiu Laurel said in a statement.
President Ferdinand Marcos Jr. signed Executive Order (EO) No. 62 in June, implementing a tariff cut from 35 percent to 15 percent on rice and other agricultural products.
Marcos said in the EO that “[t]he implementation of an updated comprehensive tariff schedule aims to augment supply, manage prices, and temper inflationary pressure of various commodities, consistent with the Philippine national interest and the objective of safeguarding the purchasing power of Filipinos.”
READ: Marcos formalizes rice tariff cut via EO 62
However, agricultural groups previously filed a petition asking the Supreme Court to nullify the EO, saying that it was hastily done without proper consultation and investigation. The petitioners said lowering the tariffs “can lead to an influx of cheaper imported goods, undermining domestic producers’ and farmers’ sales and products.”
Meanwhile, the DA secretary said it was not until August that there had been a significant increase in import volumes to 385,000 metric tons (MT). The US Department of Agriculture said in a report that the rice import for 2024 will be at 4.6 MT, slashed by 100,000 MT, due to the “slowing purchases” of Vietnam, the country’s top source for imported rice.
The department also said that “[g]lobal rice prices remain high due to robust demand from Malaysia and Indonesia, which has been exacerbated by Thailand and Vietnam’s attempts to push prices higher.”
The secretary also noted that farmers should not be “shortchanged” due to the wet season where the price of palay can be bought at a lower price when the current price is pegged between P23 and P25 per kilo.
“Given the wet season, some areas are seeing palay being bought at PHP16 to PHP 17 per kilo. We need to monitor this closely to ensure farmers are not shortchanged,” Tiu Laurel added.
READ: Groups ask SC to stop Marcos rice tariff order