Rising rice prices in Philippines fuel food inflation concerns
Retail prices for imported and locally produced rice in the Philippines rose further by 4% to14% this month, government data showed on Friday, as global and domestic farmgate prices soared, adding pressure on food inflation.
The steady rise in prices of the country’s staple food pushed local rice inflation to 4.2% in July, the fastest pace since 2019, indicating growing pressure on the country, a majorimporter of the grain, to rapidly increase its stockpile.
Adding to supply risks, the Philippines is bracing for the impact on harvests of dry weather brought by the El Niño phenomenon, which the government hopes will not be severe.
The Department of Agriculture (DA) said it hopes to get “better terms” for an additional 300,000 to 500,000 metric tons of rice imports this year by private traders, as it seeks to lower prices.
Vietnamese rice exporters are now offering lower prices to Philippine traders, and the DA will work with the government of India to allow Manila to import rice on humanitarian grounds, said agriculture undersecretary Domingo Panganiban.
Local farmgate prices are rising because of the usual lean domestic harvest between July and September, while traders at the same time are competing for supplies, said Jayson Cainglet, executive director at farmers’ group SINAG.
He also blamed surging import prices.
The United Nations food agency’s rice price index rose 2.8% in July from the month before to its highestin nearly 12 years, as prices in key exporting countries jumped on strong demand and India’s move to curb exports.
While the Philippine central bank is painting an upbeat outlook on inflation after it slowed for six straight months from February, economists say rising prices of rice, which accounts for 9% of the consumer basket, is a challenge.
“The steep increase is a big upside risk given how heavily weighted rice is in the CPI basket,” HSBC economist Aris Dacanay said.
Source: Reuters (Reporting by Enrico Dela Cruz; Editing by Kanupriya Kapoor and Gerry Doyle)
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