Rice prices to spike in August amid oil crisis: Laurel

Rice prices are expected to spike by August as a result of the global oil disruption caused by the ongoing United States-Israel war on Iran, the Department of Agriculture confirmed Tuesday. 

DA Secretary Tiu Laurel Jr. said that although retail prices of the staple grain remain relatively stable at present, almost four weeks into the conflict, chances are it will increase five months later, or around August. 

“I personally think that the price of rice will increase around August this year. Pork prices will not increase yet because there are still plenty of stocks of imported products in cold storage,” Laurel said during the first public hearing of the Senate Proactive Response and Oversight for Timely and Effective Crisis Strategy, or PROTECT Committee, established to tackle government response in the Middle East crisis. 

If pork imports remain uninterrupted for months ahead, only the exchange rate and freight will be factors in the price increase, Laurel added.

Data from the DA showed that retail prices of basic commodities such as well-milled rice and medium eggs remained steady at P45 per kilo and P8 each, respectively, from 16 February (pre-conflict) until 21 March. 

Pork ham and scorpio cabbage also remain stable at P350 and P80, respectively, while retail prices of local pork belly and chicken fell by P10, or from P370 and P200 to P360 and P190, respectively. 

During the same period, tomato prices also fell from P80 to P60, while eggplant prices jumped from P80 to P100. 

Meanwhile, local carrots saw the highest price increase, rising from P100 to P160.

DA Assistant Secretary U-Nichols Manalo said that when the situation hits the
“worst-case scenario,” or when the average Dubao crude oil reaches $200 per barrel, local pork belly could jack up to P588.10 per kilo, while chicken prices could jump to P324 per kilo. 

As for corn, the second-most-important crop in the country, supply could decrease to 156,636 metric tons from the projected 3.3 million metric tons when the average Dubai crude oil price reaches $200 per barrel. 

The threat of subsequent oil price surges will further hit farmers, who are already grappling with the soaring prices, adversely affecting their crops and market supply.

Senator Risa Hontiveros said the ongoing oil crisis caused by the war will affect imported fertilizer, which will subsequently be felt in the Philippines through the expected drop in rice production and supply, potentially triggering a price increase.

“If these fertilizers are not procured by this month, it will trigger a massive harvest decline by August. And we know that when supply is limited, prices will eventually become more expensive,” she stressed. 

Laurel told the committee that the DA is still on standby for the release of P10 billion in fuel subsidies for farmers and fisherfolk by the Department of Budget and Management. 

According to the DA chief, they already rolled out last week agricultural and fishery aids sourced from the agency’s continuing funds from previous years, though the budget was grossly insufficient to cover 4.175 million beneficiaries. Of the total, only 25,000 received assistance.

Laurel said if the DBM releases the needed funds as scheduled in the second week of April, farmers and fisherfolk would likely get their assistance on 6 April. 

“We will be giving P2,325 to 4.175 million beneficiaries registered with the RSBSA (Registry System for Basic Sectors in Agriculture), of which 2.197 million are rice farmers whose land is two hectares below,” the DA chief averred. 

Corn farmers, meanwhile, account for 1.475 million, followed by fisherfolk with motor boats at 399,000 and sugar farmers at 102,000. 

“Food security is not just an agricultural issue. It is national stability. Our task is to ensure that the system absorbs the shocks rather than amplifies them,” Laurel averred.