Agriculture department evaluating proposal to cap price of imported rice

THE Department of Agriculture (DA) said it is studying a price cap of P50 per kilo on imported rice, possibly by April, to help keep the staple grain affordable for consumers in the face of the oil shock and rising food costs.

“So as not to affect the farmgate price of palay (unmilled rice), P50 per kilo would be an appropriate price cap,” Mr. Laurel told reporters on Monday.

Mr. Laurel said he is consulting the DA’s legal section and other departments regarding the price ceiling, noting that the measure must not result in unintended consequences for farmgate prices earned by domestic farmers.

He said if the price cap passes legal vetting, the DA will recommend the proposal to President Ferdinand R. Marcos, Jr. as part of a package of actions to deal with the impact of the oil price shock.

The DA said the recent increase in rice prices has partly been driven by higher freight costs following the outbreak of fighting in the Middle East.

“Freight costs increased. For instance, freight cost for rice shipments from Vietnam rose to about $40 per metric ton, from $20 per metric ton previously,” Mr. Laurel said.

Despite the increase, the DA expects the ongoing harvest to help stabilize prices in the coming weeks.

“Luckily, peak harvest starts now and lasts until the end of April. We expect a lot of (volume), so that should temper prices and possibly bring them down,” Mr. Laurel said.

The DA added that it has begun selling rice through state-run firms Food Terminal, Inc. (FTI) and Planters Products, Inc. (PPI) in Metro Manila and Cebu, with plans to expand distribution to other cities.

Mr. Laurel earlier told BusinessWorld that the FTI’s recently launched rice brand “Binhi” is being sold in 36 markets across Metro Manila at P48 per kilo.

He added that PPI has also started selling rice at P45 per kilo in Cebu markets, including those in Danao and Mandaue.

Mr. Laurel said the initiative aims to stabilize rice prices by offering competitively priced alternatives.

“We are creating competition so that the price of imported rice becomes more reasonable. This should help consumers,” he said.

However, Mr. Laurel warned that the government may intervene directly if prices remain elevated due to possible profiteering.

He said the DA is monitoring market prices after receiving reports that well-milled rice is being sold at P60 to P65 per kilo, which he said exceeds what the department considers reasonable.

“If importers do not behave and prices remain high, as we observed in Cebu, we can import rice ourselves and sell it,” he said. — Vonn Andrei E. Villamiel