July 12, 2024
MANILA – Rice prices in the Philippines are expected to fall further as India is looking to ease restrictions on its rice exports thus bringing down global prices of the key staple, according to a report by Nomura.
“We expect the Philippines to be the biggest winner in Asia, given the high share of rice in its consumer price index basket, its dependence on rice imports and recent rice import tariff reductions.
Easing inflation would further support our view that BSP will start its easing cycle by October, although the risk of an earlier rate cut in August is rising,” the report added.
Rice inflation in June slowed for the third straight month to 22.5 percent, from 23 percent in the previous month. Rice also contributed 45.2 percent of overall inflation, equivalent to 1.7 percentage points.
“If implemented, this should help cool global rice prices, since India accounted for 35 percent of global rice exports before its export restrictions were implemented. Asia will benefit too, since rice is a staple food in the region, especially in emerging Asian economies,” Nomura said.
India, the world’s biggest rice exporter, has imposed restrictions on rice exports since late 2022 amid adverse weather conditions that hit domestic rice production and pushed up local rice prices.
A fall in Indian rice prices will benefit consumers in Asia as it is the largest producer and consumer of rice.
According to Nomura, the Philippines depends on imports for 28 percent of its rice needs. Also, the weight of rice in the Philippines’ inflation basket stood at 8.9 percent, the highest among its peers in the region. This was higher than India’s 4.7 percent, Indonesia with 3.4 percent, and Thailand with 3 percent.