WB sees rice price jump of 55% in 2008, urges trade lib

MANILA, Philippines- The World Bank on Tuesday joined the calls for the government to open the importation of rice to the private sector to avert a possible rice shortage in the Philippines. The lender's latest estimates show that the price of rice worldwide is expected to shoot up by 55 percent, on top of the 7-percent rise in 2007. “The best thing to do is for the government to begin to liberalize the market and have prices reduced for all, that's one of the ways to address the issue. We need competition, irrespective of the kind of commodity," Vera Songwe, World Bank lead economist for the Philippines, told reporters The World Bank also projected a 22.3-percent jump on the price of oil in the global market; 8.8-percent increase in coconut oil; 65.3-percent hike for iron ore; a decrease by 2.1 percent in the price of copper and a 2.6-percent rise in rubber's price. Earlier, former Socioeconomic Planning secretary Felipe Medalla said the government must allow the private sector to import rice while encouraging the Filipino farmers to increase their production because of the high price of rice. Last month the Rice Watch and Action Network also warned that unless the government acts fast, prices of commercial rice could reach P40 per kilo in the next few months, as the Philippines faces serious rice supply crisis due to dwindling domestic production. Rice Watch said the rice crisis might erupt in July, the start of the lean season, but the government said it would deal with the looming crisis with heavy rice importation. According to Rice Watch's estimate, the country would need 2.8 metric tons of rice during the lean months. However, the April rice harvest would only be 1.9 MT, which is good for two months. The Philippines consumes about 11.9 million metric tons of rice annually, most of which is grown domestically. But dwindling domestic production and corruption in the rice supply chain have created a recurrent shortfall of about 10 percent. The government has to purchase about 2 million metric tons from the international market every year, making the Philippines the world's biggest rice importer. - Cheryl Arcibal, GMANews.TV