The Department of Agriculture (DA) announced Wednesday that consumers can expect to see the full effect of the rice import tariff reduction by January 2025.
Agriculture Secretary Francisco Tiu Laurel, Jr. earlier said that rice prices are projected to start declining as early as October due to the government’s decision to reduce import tariffs. However, he cautioned that the full impact may take some time to materialize.
“Since demand for food usually spikes in December, we anticipate seeing a more substantial drop in rice prices by January,” he said.
Executive Order 62 effectively halved duties on imported rice to 15 percent from 35 percent to lower the country’s staple.
Economic managers estimate that the tariff reduction could decrease prices by around P5 to P7 per kilo of rice.
The DA chief explained that the expected decline in rice prices has been delayed due to traders stockpiling rice imports in anticipation of an El Niño-induced supply shortage.
Between December 2023 and May 2024, rice importation exceeded consumption, leading to an excess of approximately 612,000 metric tons of imported rice at the higher 35 percent tariff.
Ahead of the tariff reduction, rice imports decreased in June and July.
“It wasn’t until August that we saw a significant increase in import volumes,” Tiu Laurel said.
In addition to high import tariffs, the soaring global price of rice has pressured traders to purchase palay (unmilled rice) from local farmers at elevated prices. With current palay prices now lower, a similar reduction in rice prices in the market could be forthcoming.
Global rice prices remain high due to strong demand from Malaysia and Indonesia, coupled with attempts by Thailand and Vietnam to push prices higher.
