August 27, 2024 | 12:00am
MANILA, Philippines — Local rice importers risk the cancellation of supply contracts by Vietnamese exporters as the latter seek higher prices, dampening the Philippines’ hopes for cheaper rice from abroad following a hefty tariff cut by the government.
The Philippine Rice Industry Stakeholders Movement (PRISM) said rice contracts signed by local importers are being canceled by Vietnamese suppliers who are seeking to renegotiate the prices to reflect present market conditions.
PRISM co-founder Orly Manuntag said rice export prices in the neighboring Southeast Asian country have increased by $60 to $70 per metric ton, forcing Vietnamese suppliers to call off contracts with Philippine importers.
International reports indicate that Vietnamese rice export prices have steadily increased in recent months on the back of foreseen higher global demand for the grain, especially in neighboring countries like the Philippines and Indonesia.
“The Philippines got it at a lower price. So the ones that we got at $600 is now priced at $680 [per metric ton],” Manuntag said.
The price uptick happened just weeks after the lowering of the country’s rice tariffs from 35 percent to 15 percent took effect on July 5, industry players said.
The rise in export prices would reduce whatever savings would be generated and passed on to consumers due to the tariff reduction, they added.
Government officials earlier noted that the tariff reduction would lead to a drop of P6 to P7 per kilogram in retail rice prices.
“There has been a slowdown (in imports) because once you cancel the contract, the supplies will not come into the country,” Manuntag said.
PRISM is one of the industry groups which said that rice prices could drop by P42 to P46 per kilogram once the rice tariff cuts take effect.
Based on the group’s computation, the tariff reduction would result in savings of about P250 per 50-kilogram bag of imported rice or about P5 per kilo.
The rice at P42 per kilogram would be 100 percent broken while the 25 percent broken variety would be about P45 per kilo at retail, Manuntag said.
“The P45 per kilogram can be achievable right now. But still, we have to work on it,” he said.
“It still depends on the current price in the world market, plus logistics, plus dollar (exchange rate),” he added.
To avoid disruptions in domestic supplies, the group is urging the government to intervene by talking to the Vietnamese government to compel their rice exporters to honor their signed supply contracts with Philippine importers.
PRISM founder Rowena Sadicon said importers are now having a hard time looking for suppliers whose prices would result in a retail price of P42 per kilo in the local market.
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