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A report released by the Food and Agriculture Organization of the United Nations (FAO) in August 2002 disclosed that the export price of Vietnam 5 percent broken rice averaged $191 per metric ton (MT). Thailand 25 percent broken rice, meanwhile, sold at an average of $176 per MT. In 2002, the reference basket price of the Organization of Petroleum Exporting Countries (OPEC) was at an average of $24.36 per barrel.

Despite the peso’s fall to an average of P51.6036 to the US dollar in 2002, according to data from the Bangko Sentral ng Pilipinas, and because oil was cheap which meant that fertilizer was affordable, it made more sense to import rice at the time. The low cost of logistics provided an additional incentive to buy more foreign rice. Based on a report published by the Philippine Rice Research Institute, the country’s rice imports reached 1 million metric tons (MMT) in 2002 to plug the shortfall in production.

It was in 2008 when the Philippines had to confront the harsh reality that its rice requirements will take a backseat to the need of exporting countries for the food staple. Export bans imposed by Vietnam and India and panic buying caused a surge in prices. From a low of nearly $200 per MT in 2002, export prices shot up to more than $1,000 per MT, causing retail prices to soar to unprecedented levels.

Export prices had since declined to below $1,000 per MT, but it will never return to the levels seen during the early 2000s. While the world enjoyed cheap oil during the pandemic years, those levels were just a blip and may never be seen again unless the world is struck by another scourge like Covid-19. The export ban imposed by India in 2023 also reminded importers like the Philippines that they play second fiddle to the food requirements of exporters.

The food price crisis caused by the war in the Middle East is again cautioning policymakers to not let the country’s topographical limitations crimp efforts to further increase the productivity of rice farms. There is simply no reason to abandon the goal of raising rice output particularly since dedicated funds are now available for this purpose. In fact, the Rice Competitiveness Enhancement Fund (RCEF), which was created by virtue of the Rice Tariffication law or Republic Act (RA) 11203, is bigger at P30 billion annually from the initial P10 billion (See “Rice tariff collections hits a record P34.2 billion in 2024,” BusinessMirror, May 29, 2025).

RA 12078, which amended the original rice tariffication law, mandated the allocation of P30 billion for RCEF until 2031. Agencies and institutions should use the P30 billion not only to raise production but address the issues that have bogged down the sector for years, such as low yield, high labor cost and the lack of farm infrastructure and facilities. Removing these obstacles may not turn the Philippines into another rice exporter in Southeast Asia but it would make retail prices stable and make the staple more accessible to its growing population.

Source : businessmirror