The Philippines and China will both keep their statuses as the world’s top rice importers, data from the US Department of Agriculture’s (USDA) Foreign Agricultural Service (FAS) showed.

In its latest report on global rice production, USDA adjusted its trade forecast for the Philippines and China, now expecting both countries to increase their requirements for imported rice.

For the Philippines in particular, USDA now expects the Southeast Asian nation to import 2.1 million metric tons (MT) of rice instead of just 2 million MT for this year.

This is because of the reduced Most Favored Nation (MFN) tariff rate and strong demand.

To recall, President Rodrigo Duterte issued Executive Order (EO) 135 last May, effectively lowering the MFN tariff on rice so that the original 40 percent in-quota tariff and 50 percent out-of-quota tariff have both been reduced to 35 percent.

The result is that all exporting countries face the same tariff now as ASEAN countries.

“The Philippines is expected to be the second-largest importer in 2021, and recently announced a change to its import tariffs that have the potential to shift its suppliers,” USDA said.

This development, according to USDA, will affect the local demand for rice coming from Vietnam, which has been the Philippines’ top source for the imported staple.

To be specific, Vietnam’s rice exports for this year are now seen at only 6.3 million MT, instead of 6.4 million MT, due to increased competition with other countries like India.

“Traditionally, ASEAN members Vietnam and Thailand have been the most prominent exporters [in the Philippines] given the proximity, established trade relationships, and ability of these countries to provide government-to-government agreements during the period of quantitative restrictions. However, since 2019, Vietnam has become the primary rice supplier to the Philippines due to its lower prices,” USDA said.

“Non-ASEAN countries, including India and Pakistan, have more competitive prices and the reduced tariffs would result in lower landed prices,” it added.

However, USDA pointed out that these non-ASEAN Asian countries would need to increase consumer awareness and build business relationships in order to make significant gains in market share in the Philippines.

Meanwhile, China is still the world’s top rice importer, with USDA now expecting the country to import 3.2 million MT of rice, higher than the earlier forecast of 2.9 million MT.

This is due to strong demand driven by higher consumption, said USDA. The other day, Finance Secretary Carlos Dominguez 3rd said EO 135 will allow the Philippines to diversify its market sources for rice and maintain the stable supply and affordable price of the cereal for Filipino consumers.

“I think there will be a shift in the imports of Thai and Vietnamese rice, and Burmese [Myanmar] rice, to rice from other countries where the value is much lower. Just keep an eye on that,” Dominguez told Customs Commissioner Rey Leonardo Guerrero during a recent Department of Finance (DOF) executive committee (Execom) meeting.

A former agriculture secretary, Dominguez specifically cited India as a possible source of cheap rice imports.

Source: Manila Bulletin (