‘Weak peso to hike costs of imported farm goods’
MANILA, Philippines — The weakening peso could drive up the cost of imported agricultural commodities such as rice and fertilizer, according to the Department of Agriculture (DA), further straining food prices amid production constraints caused by El Niño.
DA Assistant Secretary and spokesperson Arnel De Mesa said consumers may see slightly higher prices for imported farm goods due to the declining peso.
“This will affect our imports, like rice, meaning we will need more pesos to purchase the same volume. In short, most imported items will be impacted,” he told reporters in a press briefing.
De Mesa said imported rice prices could see a slight increase by November but assured consumers that retail prices for the food staple would not reach P60 per kilo.
“The price of imported rice may see some movement due to the rise in value of the US dollar. Freight costs are also fluctuating due to the prices of petroleum products,” he added.
The price for imported premium rice was between P48 and P64 per kilo in local markets, while imported well-milled rice was priced at P47 to P50 per kilo, according to the DA price monitoring as of Oct. 28.
The country is expected to import more than five million MT of rice this year due to the decline in local production brought about by the effects of El Niño.
As of Oct. 22, the country has imported a total of 4.37 million metric tons (MT) of rice, according to data from the Bureau of Plant Industry.
“That’s already a significant amount. Of course, we need to account for the possibility that El Niño could become more severe or prolonged, as it would span our entire dry cropping season,” he added.
The DA has projected a 900,000 MT to one million MT drop in local palay, or unmilled rice production, due to the below-normal rainfall activity caused by the climate event.
De Mesa stressed that the declining peso could further impact the prices of fertilizers, which have surged due to high petroleum prices.
“All of our fertilizers are imported, it will also have an effect. This means that when it comes here, it will be more expensive,” he added.
The national average price for urea fertilizer could go as low as P2,206 per 50-kilo bag and as high as P2,670 per 50-kilo bag, according to the Fertilizer and Pesticide Authority.
The peso last Oct. 27 breached the 64 level, sinking to another historic low of 64.17 against the dollar.
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