The Samahang Industriya ng Agrikultura (SINAG) has expressed apprehension regarding the government’s heavy reliance on imported rice as a measure to combat inflation, especially following the recent decisions of Vietnam and India to reduce rice exports.
SINAG executive director Jayson Cainglet emphasized that for the past seven years, the government has been depending on rice imports to control inflation, given that rice and other cereal products, including corn, contribute to about 35% of the total inflation rate.
“Seven years is a long time, but we must change the narrative now. The most crucial thing is for the country’s economic team to accept that they have failed miserably in equating unlimited rice importation and lowering rice tariffs as our primary solution to combat inflation. Unlimited imports and reduced tariffs have never tamed rice prices, and they never will,” Cainglet said.
The Food and Agriculture Organization (FAO) has forecasted global rice production to reach 523.7 million tons this year, with only 56.4 million tons being traded internationally. The FAO also anticipates a 5% contraction in global rice trade for the current year.
Cainglet highlighted that the relatively thin rice market makes the supply and prices of rice more vulnerable, particularly in the face of extreme weather events like El Nino. He pointed out that this year, El Nino has further impacted the market, exacerbating price fluctuations.
Notably, the FAO reported that the price of Thai rice has risen from $499 per ton in June to $520 per ton in July and has significantly increased from $418 per ton compared to the previous year.
Cainglet underlined the implications of India and Vietnam’s decisions, as these two countries account for a significant portion of global rice production and exports. He called on the National Economic and Development Authority and the economic team to acknowledge these realities and reconsider policies that favor privileged importers and traders, which could heavily impact rice-importing nations like the Philippines.