Global Markets: Rice – Philippine Imports at Record Levels

Rice harvest. ©Debra L Ferguson Stock Photography

As of March 5 2019, the Philippines has implemented a law replacing rice import quantitative restrictions with tariffs and reverting the Minimum Access Volume (MAV) from 805,200 tons to its 2012 level of 350,000 tons.

Rice is a staple food in the Philippines, and the law is intended in part to spur imports in order to quell domestic unrest caused by inflation. As a result of this legislation, higher rice imports are expected from nearby Association of Southeast Asian Nations member countries, with their relative low cost and preferential access to the Philippines.

Given the high non- Most Favored Nation tariff rate and in the absence of a free trade agreement, it is not anticipated that the United States will be competitive enough to pick up much of the expanded volume of the Philippine imports, which are now forecast at 2.6 million tons. This is a record not seen since the international price spike in 2008 and would make the Philippines the second-largest global importer in 2019.

There remains a large spread between Philippine and Southeast Asian prices, with Philippine wholesale quotes ($730/ton) more than twice Vietnamese exporter prices ($344/ton).

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