Rising rice prices in Philippines fuel food inflation concerns

MANILA - Retail prices for imported and locally produced rice in the Philippines rose further by 4 per cent to 14 per cent in August, government data showed on Friday,

as global and domestic farm gate prices soared,

adding pressure on food inflation.

The steady rise in prices of the country’s staple food pushed local rice inflation to 4.2 per cent in July, the fastest pace since 2019.

It indicated growing pressure on the country, a major importer of the grain, to rapidly increase its stockpile.

Adding to supply risks, the Philippines is bracing itself for the impact on harvests of dry weather brought by the El Nino phenomenon, which the government hopes will not be severe.

The Department of Agriculture said it hopes to get “better terms” for an additional 300,000 to 500,000 tonnes of rice imports this year from private traders, as it seeks to lower prices.

Vietnamese rice exporters are now offering lower prices to Philippine traders.

The Department of Agriculture will also work with the government of India to allow Manila to import rice on humanitarian grounds, said Agriculture Undersecretary Domingo Panganiban.

Local farm gate prices are rising because of the usual lean domestic harvest between July and September, said Mr Jayson Cainglet, executive director at farmers’ group Sinag.

Traders are competing for supplies, he added.

Mr Cainglet also blamed surging import prices.

The United Nations food agency’s rice price index rose 2.8 per cent in July from the month before to its highest in nearly 12 years, as prices in key exporting countries jumped on strong demand and

India’s move to curb exports.

While the Philippine central bank is painting an upbeat outlook on inflation after it slowed for six straight months from February, economists say rising prices of rice, which accounts for 9 per cent of the consumer basket, are a challenge.

“The steep increase is a big upside risk, given how heavily weighted rice is in the CPI (consumer price index) basket,” HSBC economist Aris Dacanay said. REUTERS