Savings from tariff cuts can pull down rice prices by P4 – P6 per kg — farmers

- Advertisement -

The Federation of Free Farmers (FFF) yesterday said savings from tariff cuts, if passed on to consumers in full, could pull down rice prices by at least P4 to P6 per kilogram (kg).

The group said in a statement yesterday it has renewed its call to the government to reinstate the 35 percent tariff on rice imports, saying the reduction to 15 percent has benefitted importers and wholesalers and not the consumers.

FFF said its estimates would show retail prices of rice with 5 percent brokens could go down to P50 per kg from the current P54 per kg while regular-milled rice with 25 percent brokens could in turn be sold for as low as P45 per kg. from the present P50 per kg range.

- Advertisement -

The group said that importers, wholesalers and retailers could still enjoy regular margins despite these price reductions.

“If the government cannot discipline the importers and wholesalers, it might as well restore the tariff rates to 35 percent. Retail prices should not increase because we will just be removing the extraordinary profits that the middlemen have pocketed,” said Raul Montemayor, FFF national manager.

The group said that an analysis of rice imports data from the Bureau of Customs, show that average import prices between July and December 2024 had gone down by about P9 per kg compared to prices during the first six months of the year.

FFF said the decline was mostly due to the reduction in import tariffs from 35 percent to 15 percent in July 2024 under Executive Order No. 62 and the softening of international prices by a little over P3 per kg.

However, the group said that based on data from the Philippine Statistics Authority, retail prices for well-milled rice went down by an average of only about P2 per kg during the same July to December period, with importers and wholesalers keeping most of the balance of P7 per kg to themselves.

FFF said that at most, trading margins of retailers grew by only P0.30 per kg.

Montemayor also said that while cheaper imports have not brought about significantly lower retail prices, local traders have started to buy palay from farmers at lower prices to hedge against a glut in cheap imported rice at the wholesale level.

Meanwhile, the Department of Agriculture (DA) has proposed the price threshold that will be considered in declaring a food security emergency will be based on local production, farm gate prices, inflation, stock inventory levels, global market situation outlook, weather situation outlook, foreign exchange rates and fuel prices, among others.

A source who requested for anonymity said a DA representative made the proposal in a meeting of the National Price Coordination Council yesterday.

The source cited the DA presentation which said three- to five-year historical data will also be considered.

The amended Rice Tariffication Law authorizes the declaration of rice emergency which would allow the release of rice stocks held in reserve by the National Food Authority to help boost supply in the market and immediately bring down retail prices.

Based on DA’s monitoring of public markets in the National Capital Region, the price as of last Friday of local well-milled rice is between P40 to P52 per kg and regular milled, P38 to P48 per kg.

The price of imported well milled rice is at P40 to P54 per kg, while the price range of imported regular milled rice is at P40 to P48 per kg.

Imported rice ranges from P53 to P65 for the special variety and P52 to P60 for premium.

For local rice, the special variety costs P55 to P63 per kg and premium, P48 to P58 per kg. 

Author

- Advertisement -

Share post: