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Philippines Takes Steps to Secure Rice Supplies as World Prices Rise

The Philippines, one of the world's largest importers of rice, is taking steps to ensure supplies as international rice prices rise and stocks come under pressure. Douglas Bakshian reports from Manila.

Philippine Agriculture Secretary Arthur Yap says there is no rice shortage in the country and the government is working on several fronts to ensure that ample supplies continue.

He says the government's existing rice reserve will last 57 days, and an additional six days of imported supply is on the way. The government also plans to increase rice production domestically by 1.1 million hectares this year. On the conservation front, the government has asked fast-food chains to request that customers take a half-cup of rice, rather than a full order.

Rice supplies and prices are politically sensitive in the Philippines. It is a staple food in the Philippines, and the country consumes about 12 million tons of rice a year, most of which is produced domestically. This year it plans to import just over two million tons.

Secretary Yap notes that in the last quarter of 2007, rice on the international market sold for an average of $360 a ton, but just last week, when the Philippines went to the market, the price was $650.

A number of factors are cutting world production of rice and driving up the cost. Secretary Yap says bad weather hurt crops in Thailand and Vietnam, which are leading exporters, and also cut production in China, a major consumer of rice.

"China's winter harvest has been wrecked," Yap said. "You've got flooding in Thailand, flooding in Vietnam. You've got high prices of fuel for transportation. Urea fertilizer is 150 percent higher in the last two years."

He also says rising demand from the Middle East and Africa puts pressure on rice supplies.

President Gloria Macapagal Arroyo this week said Philippine rice prices are expected to increase but she gave assurances that there will be no shortage.