Global Markets – Rice – Philippines Nearly Ties with China as Top Global Importer

Rice harvest. ©Debra L Ferguson Stock Photography

In just a few years, the Philippines has emerged as one of the top global importers of rice, nearly on par with China.

The Philippines rice imports have nearly quadrupled, from 800,000 metric tons in 2016 to 3.1 million anticipated for 2019, representing 7 percent of total global rice imports. In comparison, China’s share of global rice imports has almost reduced by half, to just over 7 percent.

While China rice imports continue to shrink, Philippine purchases provide muchappreciated reprieve from nearby exporters in Southeast Asia. Vietnam is its primary supplier with a market share of about 70 percent, followed by Thailand, Pakistan, and Burma. Nearly all of the Philippines rice imports are long grain milled rice, with a small amount of rough rice from China and India.

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In March 2019, the Philippines implemented the Rice Tariffication Act which led to a considerable increase in imports and, consequently, decline in domestic prices. While this helped lower inflation, the Philippines adjustment to rice liberalization remains a challenge.

On September 11, 2019, the Philippines notified the World Trade Organization (WTO) of an investigation into the surge in imports, in reaction to the farmgate price dropping nearly 30 percent and the resulting loss of income for farmers. The investigation will help determine whether a safeguard measure, which could potentially double the current duty, can be imposed.

As a result of low prices, some rice farmers could shift to other crops such as corn. At the same time, the Philippine government is expanding subsidies and providing aid to farmers impacted by low prices. With a forecast for adequate production and large stocks, Philippine rice imports are expected to decline in 2020, but still remain above the five-year average.

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