Hike in rice prices blamed on high input costs

MANILA, Philippines - Agriculture Secretary Arthur Yap will be agonizing in the next few months as rice prices have started to rise, one month after the government admitted it will be importing at least 1.5 million metric tons of rice from Vietnam and Thailand. Yap himself started visiting markets Monday morning to allay fears of another hefty price increases of the cereal at a time when the National Food Authority (NFA) insisted there is enough rice for everyone. Last week, NFA administrator Jessup Navarro assured consumers the agency has 18.7 million bags of rice in its inventory. Vietnam last week announced that it is expecting to harvest more of the cereal in the first quarter, sparking more inquiries from the Philippines, the world's biggest importer, and from other Asian and African nations. Herculano Co, president of the Philippine Confederation of Grains Associations (Philcongrains), also expressed surprise at reports that rice prices in Vietnam have risen, noting that the harvest would come next month yet. "I have not noted increases in the price of rice in Vietnam," he noted. Co has been undertaking a close watch on the price swings of the cereal. He had warned that unless each country produces more rice, the possibility that a rice cartel would be established is not remote. His warning, aired in 2005, became a reality last year when Thailand mulled the idea and asked other countries to join a rice cartel to be known as the Organization of Rice Exporting Countries (OREC). The idea was stillborn, however, as the international community rejected the idea. A check with the latest figures showed that Vietnam traders are buying rice for export to the Philippines at $400 a ton, up by 6.4 percent from last month. Rice prices in Vietnam's Mekong Delta provinces also rose by 15 percent, and this trend would continue since authorities have been guaranteeing farmers a 40-percent return on their crop. Rising prices in the Philippines are the result of increases in the prices of inputs, with the Kilusang Magbubukid ng Pilipinas (KMP) explaining that the reduction in the use of chemical fertilizers is much higher than the 30 percent estimated by the Department of Agriculture (DA). KMP also scored the government for converting agricultural land for other purposes and blasted its policy of producing cash crops for foreign markets. - GMANews.TV