Could rice prices rise P6 per kilo by end-2022?

A vendor wearing a face mask for protection against the coronavirus disease (COVID-19) sleeps in a stall selling rice at a public market in Quezon City, Metro Manila, Philippines, January 5, 2021. REUTERS/Eloisa Lopez
A vendor wearing a face mask for protection against the coronavirus disease (COVID-19) sleeps in a stall selling rice at a public market in Quezon City, Metro Manila, Philippines, January 5, 2021. REUTERS/Eloisa Lopez

Rice prices may increase by as much as P6 per kilogram by the end of the year, while the rising cost of production could in turn dissuade farmers from planting the staple, according to Inquirer.

The incoming Marcos administration will then have an uphill task in achieving its goal of selling rice at as low as P20 a kilo.

Agriculture Undersecretary Fermin Adriano told reporters that as of Tuesday (7 June), a kilo of local regular milled rice is selling at P38, the same as in 2021. However, well-milled rice is now going at P41 per kilo, up from P40 per kilo last year.

According to studies by the Philippine Rice Research Institute, the average cost of producing rice has already increased by P3.13 per kilo in 2022. As of end-2020, the Philippine Statistics Authority estimated the cost of producing palay at P11.52, not including the costs of transportation, logistics, and milling.

“If production declines this main wet season due to high fertilizer and petrol prices, and global rice price rise, we will see significant increases in rice prices by the end of this year,” warned Adriano.

The Undersecretary noted that some farmers have already been forced to reduce their use of fertilizers as the cost of farm input has nearly tripled, resulting in a lower yield.

The Department of Agriculture (DA) is hence seeking more support for farmers such as fertilizer subsidies, in order to address a projected decline in the output of palay or unhusked rice.

Projected decline in production

The DA estimates that palay output will decline by about 1.1 million metric tons (MT) this year if the government cannot provide more fertilizer subsidies. This amounts to 600,000 MT of rice, or a 10-day supply.

According to the Fertilizer and Pesticide Authority, the average price of urea (prilled), the most commonly used fertilizer, has shot up to P2,998.55 per 50-kilogram bag from May 23 to 27. This is significantly higher than the P1,174.43 per 50-kilogram bag in the same period last year.

Adriano said the government can either increase productivity by providing subsidies, or bring in rice abroad from alternative sources.

He noted that the Philippines may source rice from India, in light of President Rodrigo Duterte's executive order extending the 35-percent tariff on rice imports until the end of 2022.