fficials are
playing down a possible rice shortage following the government’s own statistics
that the national inventory was down to 13 days consumption two weeks ago. The
tight supply, however, is already evident in the prices of commercial rice,
which now stand at P28 a kilo from the P23. Officials are banking on the dry
season harvest to fill the gap.
We hope the officials are right, for we are talking here of
adequate staples for 87 million Filipinos. But we also wish the officials could
give us the real score so we could be prepared just in case.
Agriculture Secretary Arthur Yap was trying to be
disingenuous when he recently said supply was not the problem, it was prices.
It’s true that in supermarkets one can find a wide array of rice varieties on
sale, thanks to import liberalization. Thai jasmine rice, Indian basmati,
Italian arborio, Japanese pearl, California long grain. Prices, however, start
at P50 a kilo, which is beyond the reach of the mass of consumers.
The government is currently looking around for foreign
suppliers of 1.8 million tons it wants to import. Thailand does not have the
surplus to spare. Neither does Vietnam which has suspended rice exports. In
fact, Gloria Arroyo last month went outside normal diplomatic channels to ask
Vietnamese Prime Minister Nguyen Tan Dung to guarantee a supply of up to 1.5
million tons. Vietnam, however, could ensure a shipment of only 1 million tons,
including 700,000 tons already contracted for in January and December.
This week, the Philippines officially informed foreign
governments it was tapping the East Asia Emergency Rice Reserve, a stockpile
sourced from Southeast Asian countries as well as China, Japan and Korea. We are
not sure if other countries have excess stocks that could be tapped under the
reserve arrangement. Thailand, for example, has committed only 15,000 tons. Even
if they do have the stocks, the Philippines still has to pay market rates.
And this is where Yap’s reference to rising prices come in.
Prices this week ranged from $618 to $745 a ton, including freight. At an
average of $700 a ton, this translates to P28,000 a ton or P28 a kilo.
The current price of NFA rice is P18.50 a kilo. If government
maintains that price, the current price requires a subsidy of P10 a kilo.
We are sure Gloria Arroyo, given the political troubles she
is facing, will be able to find the money to bankroll NFA operations.
But first she has to find those excess foreign rice stocks. And soon.
