Rice is a basic staple in the country of 110 million people. But the nation cannot produce enough for itself and has been one of the world’s top importers of the grain.
“The current surge in retail prices of rice in the country has resulted in a considerable economic strain on Filipinos, particularly those who are underprivileged and marginalised,” Marcos said in an executive order.
Despite a “steady supply”, Marcos alleged widespread “illegal price manipulation, such as hoarding by opportunistic traders and collusion among industry cartels in light of the lean season” were to blame.
A ban on rice exports by major producer India, the war in Ukraine, and unstable world oil prices have also “caused an alarming increase in the retail prices of this basic necessity”, he added.
Marcos said the government, with police help, would “intensify ongoing inspections and raids of rice warehouses to combat hoarding and illegal importation”.
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Price caps are “not ideal”, Victor Abola, an economist at Manila’s University of Asia and the Pacific said.
“But now that it is implemented the challenge for the government is to make sure that we have enough rice harvest these coming months so they can bring down the prices of rice to their desired price.”
“It’s really a difficult balancing act at this time,” Astro del Castillo, managing director of Manila securities firm First Grade Finance said.
Failing to rein in high inflation would hamper economic growth, he added.
Inflation rose 6.8 per cent in the January-July 2023 period compared with the previous year, government data show, after peaking at a 14-year high of 8.7 per cent in January.
Wilbert Lee, who represents the agriculture sector in the House of Representatives, called the price cap a “stopgap measure” and warned it could backfire.
“The government must ensure strict compliance as this may result in supply drop in the market. It may discourage the private sector from selling with little or no profit,” Lee said in a statement.
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Annual water buffalo race kick-starts rice cultivation season in Thailand
Annual water buffalo race kick-starts rice cultivation season in Thailand
West Java, Indonesia, has had barely any rain since April, and must rely on irrigation channels that have nearly dried out.
“We don’t know what’s going to happen in the next month or two,” said farmer Akma Rangga, who worries that he may have to delay the next planting cycle if his plot gets no rain by October, amid Indonesia’s driest weather in four years.
Hot weather in key growing regions across Asia threatens harvests, driving up rice prices as much as a fifth, with countries led by top exporter India limiting shipments to rein in inflation and ensure food security for their people.
Combined with slow imports and stocks in Indonesia’s biggest rice market down about a third from last year, the heat brought by an El Nino weather pattern expected to peak around October is fuelling concern that prices could hit their highest in years.
If the situation does not improve, rice prices could hit a multi-year high of 15,000 rupiah (98 US cents) a kg, said Zulkifly Rasyid, chairman of a cooperative of rice wholesalers in Indonesia’s largest market of Cipinang.
Just 1.5 million metric tons of the grain have arrived from a total of 2.3 million Indonesia authorised this year to blunt the impact of El Nino, state buyer Bulog has said, with 400,000 tons still on the way, and 400,000 tons yet to be contracted.
Bulog, which typically imports from major sellers India, Thailand and Vietnam, is turning wider afield to Cambodia and Myanmar, but its chief executive, Budi Waseso, said Cambodia’s asking price was too high and he hoped to find alternatives.
“God willing, by November the supplies will be here,” he said.
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On paper, supplies should be adequate. The National Food Agency estimates El Nino could shrink rice output between 5 per cent and 7 per cent this year from 31.54 million tons last year, but the shortfall should be covered by an existing import quota.
Indonesia’s last El Nino, in 2019, took down rice output about 7 per cent, but domestic prices kept steady, as Bulog had adequate supplies to intervene in the market after large imports a year before.
Though only a moderate impact of the warming Pacific current had been expected, average rice prices have risen 15 per cent on the year to 13,800 rupiah a kg, as Bulog began the year with low stocks and the import decision came late.
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