A member of Congress who first warned more than two years ago of a looming rice shortage is now pushing for a strategic stockpile to be put up by the Association of Southeast Asian Nations (ASEAN) as a regional buffer against future shortages of the staple.
“We envision a durable ASEAN Strategic Rice Reserve, from which member-countries such as the Philippines may obtain emergency supply, should a future need arise,” Catanduanes Rep. Joseph Santiago said.
Once established, Santiago said portions of the reserve could be released in a controlled manner into the open market to ease potential supply issues that could put unwanted upward pressure on the price of rice.
“In fact, the mere creation of the reserve could somewhat discourage potential price manipulation moving forward, because traders will be aware that there is always this extra stockpile ready to be released into the open market, if necessary,” Santiago said.
“If we look at the experience of the United States with respect to their Strategic Petroleum Reserve, the federal government there has been successfully releasing crude oil from the stockpile to ward off potential new inflationary pressures on oil prices. This mechanism could also be applied to rice,” Santiago said.
ASEAN members — the Philippines, Malaysia, Singapore, Indonesia, Thailand, Vietnam, Myanmar, Brunei, Cambodia and Laos — previously pledged to initially stockpile 300,000 metric tons (MTs) of rice as a reserve against a possible future lack of the commodity.
However, Santiago said 300,000 metric tons might not be enough as a “solid and effective” cushion. He said members should push for a larger stockpile.
“To put the 300,000 metric tons in perspective, this is just around 13 percent of the 2.3 million metric tons of rice that the Philippines has imported so far this year,” he said.
He said the 300,000 metric tons is not even enough to cover 10 days of rice consumption by the Philippines alone, with Filipinos now devouring up to 33,100 metric tons every day.
“If we can count on a regional Strategic Rice Reserve to guarantee us another 30 days of extra supply anytime, then we will have a bigger cushion enough for 150 days of domestic consumption,” Santiago pointed out.
The Department of Agriculture has a domestic rice stockpile equal to 120 days of consumption.
In March, world rice prices soared to a new 34-year high after the Philippines scrambled to corner additional imports and bid up prices to as high as the equivalent of P30 per kilo due to an impending domestic scarcity of the staple.
Santiago issued a statement in January 2006, warning that unless the Philippines quickly achieved self-sufficiency in rice, the country could face a potentially destabilizing shortage. This was shortly after China began importing rice due to a shortage, and Thailand temporarily suspended exports of the staple.