A farmer plants rice in a paddy field in Pulilan, Bulacan province on Aug 19, 2023. (PHOTO / AFP)
While soaring global rice prices have spiked inflation in Southeast Asia and pushed state-owned food agencies to bolster imports and impose price caps, agricultural ministers have committed to prioritizing food exports to member countries.
“We discussed the issue of food security; for example, if there is a shortage among ASEAN countries, we hope that other ASEAN countries can quickly step in to provide support,” Malaysian Agriculture and Food Security Minister Mohamad Sabu said in an interview with Bernama, Malaysia’s national news agency.
Rice considered a staple across the region, and ASEAN’s membership is comprised of both key rice exporters of Thailand and Vietnam and top rice importers Indonesia, Malaysia and the Philippines
Mohamad was interviewed at the sidelines of the 45th ASEAN Ministers of Agriculture and Forestry Meeting held Oct 4 to 6 in Kuala Lumpur.
Rice considered a staple across the region, and ASEAN’s membership is comprised of both key rice exporters of Thailand and Vietnam and top rice importers Indonesia, Malaysia and the Philippines.
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Mohamad said that both the Thai and Vietnamese agriculture ministers have assured him that they would prioritize ASEAN members in their rice shipments. This is welcome news not only to Malaysia but to Indonesia and the Philippines as well as they’re battling inflation as the rice shortage has spiked food prices. Malaysia's inflation rose by 4.5 percent while Indonesian consumer prices increased by 2.28 percent in September.
ASEAN Ministers have also convened with agriculture ministers of China, Japan and South Korea during the AMAF. In a joint press statement issued after the meeting, the ASEAN ministers commended China, Japan and South Korea’s for their combined contribution of over of 10,000 tons of rice to beef up the ASEAN Plus Three Emergency Rice Reserve.
The AMAF meeting was held at a time that global rice prices are hitting record highs on the back of India’s export restrictions and the drought parched most rice growing areas. The Food and Agriculture Organization’s all rice price index averaged 141.7 points in September, up 27.8 percent from last year.
In the Philippines, the world’s top rice importer, inflation rose by 6.1 percent in September. This, even if price cap was imposed on September 1, as retail prices of milled rice hit over 43 pesos a kilo in August or nearly 10 percent higher than the previous year. The Bangko Sentral ng Pilipinas, the country’s central bank, said it is ready to resume policy tightening measures to combat inflation.
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Philippine President Ferdinand Marcos Jr, who concurrently serves as the secretary of agriculture, lifted the price ceiling on Oct 4. In a speech delivered before distributing rice to residents of the capital region of Metro Manila, Marcos said that that the Philippines has adequate rice buffer stocks and has blamed smugglers, hoarders, and price manipulators for creating a shortage and sabotaging the economy.
According to data from the Department of Agriculture, the Philippine rice supply as of end-September was equivalent to 52 days of consumption and is likely to increase to a 74-days stock by October as the local harvest season sets in.
Roehlano Briones, senior research fellow at Philippine Institute for Development Studies, believes that the rice supply is sufficient, but noted that the agriculture department is downplaying the role of imported rice in beefing up the country’s rice supply.
“(Rice) imports account for about 20 percent of domestic consumption. And (the amount of imported rice) has been severely cut because of the very high prices. I do not share the optimism about the prices simply as a result of the (onset of the local) harvest season,” Briones told China Daily.
Indonesia, ASEAN’s biggest economy and most populous country, is set to import 2.3 million tons of rice. Arief Prasetyo Adi, acting minister of agriculture, said in an interview with Reuters that Indonesia is looking to import one million tons from China. Indonesian President Joko Widodo has also directed BULOG, the national food procurement agency, to release its stocks to the market to bring down rice prices. He said BULOG has enough stocks to stabilize prices until the end of the year.
READ MORE: Philippines curbs rice prices as inflation worry mounts
Tauhid Ahmad, director of the Jakarta-based Institute for Development of Economics and Finance (INDEF), wished that Indonesia could become self-sufficient in rice again, but he believed that won't be possible in the near future.
“The growth of rice production (in Indonesia) will continue to decline while rice consumption will be much higher than production. Fertile land areas for rice growing in (the island of) Java have been decreasing too fast, and this causes rice productivity to decrease on a national scale,” Tauhid said.
In Malaysia, Prime Minister Anwar Ibrahim has warned that rice hoarders will be arrested. Anwar also approved a rice subsidy in the Eastern Malaysian states of Sabah and Sarawak.
