Amid expectations of rice prices to decline in mid-October, the Department of Agriculture (DA) forecasts a more significant drop in staple grain prices is anticipated early next year.
This, as the DA expects the rice import tariff cut to have its ‘full impact’ in January.
“Since demand for food usually spikes in December, we anticipate seeing a more substantial drop in rice prices by January,” Agriculture Secretary Francisco P. Tiu Laurel said Wendesay.
President Ferdinand Marcos, Jr. signed Executive Order 62 in June, which reduced the rice import duty to 15 percent from 35 percent, aiming to drive its prices in local markets down by P5 to P7 per kilo.
The order took effect in July.
The agriculture chief said the projected decline in rice prices has not yet been fully felt because traders increased their imports, anticipating shortages due to El Niño.
Between December 2023 and May 2024, rice imports averaged 422,000 metric tons (MT) per month, exceeding consumption by 102,000 MT per month.
“This resulted in an excess of approximately 612,000 metric tons of imported rice at the higher 35 percent tariff, enough to cover nearly two months of consumption,” the DA said.
Before the tariff cut, rice imports declined by an estimated 176,000 MT per month in June and July.
According to Laurel, it wasn’t until August that rice imports significantly increased to 385,000 MT.
He added the rice’s high prices in the global market have pressured traders to buy palay (unhusked rice) from local farmers at prices of up to P30 per kilo.
“Given the wet season, some areas are seeing palay being bought at P16 to PHP 17 per kilo. We need to monitor this closely to ensure farmers are not shortchanged,” Laurel said.