October 1, 2024 | 12:00am
MANILA, Philippines — Government officials and industry stakeholders are hopeful prices of rice in the world market would begin to soften after India lifted its export ban on non-Basmati rice, leading to more favorable rice import prices for the Philippines.
Agriculture Secretary Francisco Tiu Laurel Jr. said he “hopes” the lifting of the India export ban would “signal” the lowering of rice prices in the global market.
Department of Agriculture spokesperson and assistant secretary Arnel de Mesa said the return of Indian non-Basmati white rice to the world market would boost available grains for trade globally.
The additional stocks, De Mesa pointed out, could ease the supply pressure in the world market and “create an impact” toward lowering world prices of rice.
Last weekend, India lifted its export ban on non-Basmati rice to prevent oversupply as the country’s grain stocks surged recently.
The export ban has been in place since July 2023 as India sought to protect its domestic consumers by shoring up rice stocks to ensure stable retail prices amid concerns in local production and uncertainties in global market and supplies.
However, India established a minimum export price (MEP) of $490 per metric ton for all non-Basmati rice that would be shipped out from India.
The set MEP is significantly lower by as much as $100 compared to the prevailing export rice prices from Vietnam and Thailand, according to DA officials and industry stakeholders.
“India could resume supplying African and Middle Eastern countries who temporarily shifted to Asian suppliers when the ban was still in place,” said Raul Montemayor of the Federation of Free Farmers.
“Lower demand could force Asian exporters like Thailand and Vietnam to lower their prices to maintain their market share, and this could mean lower import prices overall for Filipino importers,” he added.
Montemayor, however, cautioned that there is no guarantee that the decline in world rice prices would translate into lower retail prices being offered by local traders and importers.
More so, he noted that domestic rice traders have not “patronized” Indian rice despite their lower prices due to various reasons such as quality and reliability.
“Whether these lower import prices will translate to lower retail prices for consumers is another question,” he said.
But for Philippine Chamber of Agriculture and Food Inc. president Danilo Fausto, the lower prevailing export price coupled by the reduced tariff rate would entice traders and importers to bring in more rice stocks from India.
Fausto estimated that the landed cost of rice from India would be between P32 and P33, which would fetch a wholesale price of about P40 and may retail between P42 and P45 per kilo.
“Because of this lifting and the price set by India, other countries like Vietnam would be obliged to lower their prices to be able to compete,” Fausto said.
Fausto said farm gate prices of palay would not be impacted by the return of Indian rice stocks in the world market since the landed cost of these supplies are almost at par with prevailing palay prices.
“While the price of imported rice has decreased, I do not see much effect on our local palay farm gate prices since this will just be almost equal to the price of local rice when you convert palay to rice from its current buying price of traders,” he said.
“The margins of rice traders will be forced to tighten, offering a lower retail price for our rice (therefore) favoring our consumers,” he added.
The prevailing retail price of well-milled imported rice in Metro Manila markets range from P45 to P55 per kilo while regular-milled imported stocks cost between P45 and P48 per kilo, according to the DA.
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