Philippines rice inventory in peril as Vietnam reduces exports

MANILA, Philippines — The Philippines is preparing for the worst after Vietnam, the country’s biggest source of rice imports, decided to cut down on its exports to secure enough supply for its own people.

Agriculture Secretary William Dar said the agency sought the approval of a P32-billion supplemental budget to ensure that the country will have adequate rice.

“Our importation and releasing of import clearance continues, we monitor the private sector which are bringing in rice so we know if we have enough,” he said.

The Vietnamese government temporarily stopped issuing clearance for rice shipments to ensure food security as the coronavirus disease intensifies.

Vietnam is the country’s biggest supplier of rice, accounting for about 85 percent of the  total imports last year.

“For the next two months, we have enough and we are enhancing other measures so it will continue until the end of the year. And we have other sources like Thailand, Myanmar, India and Pakistan,” Dar said.

The Federation of Free Farmers, on the other hand, said problems might arise at the start of the lean season from July to September if Vietnam would continue to cut down on its exports.

In an interview with The STAR, FFF national manager Raul Montemayor said the Philippines should prepare for contingencies and prepare for the worst possible scenario.“I don’t think they will totally stop. But at what price will they be selling and at what volume? As the COVID pandemic worsens, shipping and port operations are already being affected,” Montemayor said.

“All exporting countries would see lower than normal exports because they would prioritize their consumption. And the tendency is, lower supply would lead to higher prices,” he said.

It was during the 2008 global financial crisis when Vietnam also cut down on its rice exports, prompting rice prices to shoot up to over $1,000 per metric ton. Current price is around $400 to $450 per MT.

Apart from COVID-19, Vietnam’s rice sector is seen facing difficulties this year with strong volatility on production, demand and prices. The country’s land use for growing rice will also be reduced.

Thailand, the second largest source of rice imports for the Philippines, is also forecast to tumble further in 2020, dropping to the lowest level in seven years.

“It might be too expensive for importers to bring in rice. They would think twice. And the NFA (National Food Authority) is no longer allowed to import as per the rice tariffication law,” Montemayor said.

Vietnam is currently the world’s third largest rice exporter after India and Thailand. Last year, the ASEAN neighbor exported 6.37 million MT of rice, with the Philippines as its top market at 2.1 million MT.

According to the Department of Agricultural Products Processing and Market Development in Vietnam, the Philippines continued to be the leading market for exports, but both the volume and the value of rice were lower than last year.

FFF said DA’s requested supplemental budget should focus more on beefing up local rice production.

Dar said the DA is considering early planting in most areas, including Cagayan Valley and Central Luzon to boost production during the third quarter of 2020.

Latest data showed that rice inventory is expected to reach 2.6 million MT, equivalent to 75 days, by the end of the first quarter. Filipinos consume an average of 35,369 MT per day.

“With harvest already coming in, along with the steady arrival of imported rice, we expect no shortage of the staple during the duration of the enhanced community quarantine and beyond,” Dar said.