'More substantial drop' in rice prices expected by Jan. 2025 —DA's Tiu Laurel

Agriculture Secretary Francisco Tiu Laurel Jr. on Wednesday said the full impact of the reduction in the tariff rate for imported rice would be felt by consumers in January next year.

In a news release, Tiu Laurel said rice prices are projected to start declining in October.

“But since demand for food usually spikes in December, we anticipate seeing a more substantial drop in rice prices by January,” the Agriculture chief said.

Executive Order No. 62, issued by President Ferdinand Marcos Jr., reduced the tariff rate for the imported grain to 15% from 35%, effective July.

The order aims to lower the cost of rice —the country’s main food staple— that has significantly contributed to high inflation rates due to its substantial weight in the consumer price basket.

Tiu Laurel said that the expected decline in rice prices has not yet fully materialized because traders ramped up rice imports in anticipation of a supply shortage caused by El Niño.

Between December 2023 and May 2024, rice importation averaged 422,000 metric tons per month, exceeding consumption by 102,000 tons per month.

This, the Agriculture said, resulted in an excess of approximately 612,000 metric tons of imported rice at the higher 35% tariff, enough to cover nearly two months of consumption.

Ahead of the tariff reduction, rice imports decreased to around 176,000 metric tons per month in June and July.

“It wasn’t until August that we saw a significant increase in import volumes to 385,000 metric tons,” Tiu Laurel said.

In addition to high import tariffs, the DA chief said the soaring global price of rice has pressured traders to purchase palay from local farmers at elevated prices of up to P30 per kilo.

With current palay prices now ranging between P23 and P25 per kilo, Tiu Laurel said a similar reduction in rice prices in the market could be forthcoming.

“Given the wet season, some areas are seeing palay being bought at P16 to 17 per kilo. We need to monitor this closely to ensure farmers are not shortchanged,” he said.

The Agriculture chief said that global rice prices remain high due to robust demand from Malaysia and Indonesia, which has been exacerbated by Thailand and Vietnam's attempts to push prices higher.

“Fortunately, Myanmar has reduced their prices, which has somewhat eased the pressure on rice prices,” Tiu Laurel said.

Last Saturday, the DA said it would not be recommending a higher tariff rate for imported rice in the upcoming periodic review of EO 62 as the reduced tariff regime is still in the early stages of implementation.

The National Economic and Development Authority (NEDA) had earlier said that it may take a little longer before Filipinos can feel the impact of the executive order lowering the tariff on rice imports.

In August, rice inflation eased to 14.7% from 20.9% in July due to the combined base effects and impact of reduced tariff rates.

A petition seeking the issuance of a temporary restraining order against EO 62 has been filed before the Supreme Court by Industriya ng Agrikultura (SINAG), the Federation of Free Farmers (FFF), the United Broiler Raisers Association, the Sorosoro Ibaba Development Cooperative, and former Magsasaka Party-list representative Argel Cabatbat. — VBL, GMA Integrated News