Manila, September 10, 2023 – The Philippines is facing a rapid surge in rice prices, sounding an alarm for other major importers of this vital food staple. This price escalation is a direct consequence of India’s export restrictions, which continue to send shockwaves across Asia and West Africa.
Rice inflation in the Southeast Asian nation reached its highest point in nearly five years in August, reigniting concerns that mirror the 2018 crisis, leading to the removal of a two-decade-old limit on imports. Responding to these concerns, the Philippine central bank has issued a warning that it stands ready to implement monetary tightening measures if necessary. Meanwhile, other countries are actively engaging in diplomacy and trade deals to secure their own rice supply.
Shirley Mustafa, an economist at the United Nations’ Food and Agriculture Organization, commented on the situation, stating, “We’re seeing a great deal of uncertainty. The restrictions are exacerbating price pressure.”
India’s export restrictions have disrupted the global rice market and forced other nations to scramble for supplies in an attempt to control rising rice costs, a staple in the diets of billions across Asia and Africa. In response to the crisis, Manila has imposed a price cap, which has had far-reaching consequences, including the resignation of Finance Undersecretary Cielo Magno. Her resignation was prompted by a Facebook post that seemed to question the newly implemented price cap, which was introduced earlier this month due to an “alarming” surge in retail prices.
With supply security becoming paramount, several nations are taking proactive measures to safeguard their rice supply. In a recent meeting on the sidelines of the Asean summit in Jakarta, Philippine President Ferdinand Marcos Jr. and Vietnamese Prime Minister Pham Minh Chinh discussed plans for a five-year rice supply deal. Similarly, Senegal is engaging in diplomatic efforts with India, following in the footsteps of other nations such as Guinea and Singapore, all seeking to ensure a steady rice supply.
Indonesia has also made significant strides, agreeing to sign a supply agreement with Cambodia for the first time in over a decade. This memorandum of understanding covers as much as 250,000 tons of rice annually, more than doubling the volume of a similar deal in 2012. Jakarta has also pledged to provide 10 kilograms of rice per month to millions of impoverished families during the fourth quarter of this year.
In an effort to curb rising costs, Malaysia has implemented purchase limits and initiated checks on wholesalers and commercial millers, prompted by allegations of local grain being sold as imported rice at a higher price. Myanmar has followed suit by imposing a mandatory system to record stored rice volumes to control domestic prices and deter speculation.
While there was a slight decrease in Asia’s rice benchmark this week, prices remain near their highest level since 2008, indicating that the ripple effects of India’s export restrictions are far from over. The global rice market remains in a state of uncertainty as nations navigate the challenges of securing this essential staple food.