MANILA, June 27 — The Philippines, one of the world’s biggest rice buyers, will loosen restrictions on imports of the grain, potentially boosting opportunities for key suppliers in the region such as Vietnam and Thailand.
The Southeast Asian nation plans to reduce tariffs on imports, with a charge of 35 per cent on total annual shipments up to 805,200 tonnes, and 50 per cent beyond that level, Agriculture Undersecretary Segfredo Serrano told reporters. The current tariff is 40 per cent on shipments up to 350,000 tonnes, and 50 per cent beyond that point.
Serrano, discussing the details of a recent agreement between the Philippines and major rice exporters, said the new duty rates would last until 2017.
“It’s a done deal,” he said, adding that the Philippines expects formal approval of the move from the World Trade Organisation (WTO) next month. “It will take effect immediately.”
But doubts remain about whether the new tariffs are low enough to encourage private buyers to ship more rice into the Philippines.
“It’s still high at 35 per cent. I think a 10- to 20-per cent tariff would be a good level,” said a Manila-based rice trader, declining to be named as he was not authorised to speak with media.
Easing the restrictions on rice imports has been a hot trade issue in the Philippines, with the government pushing to keep the high tariffs to protect local farmers despite the country’s commitment to support the removal of global trade barriers.
The Philippines had been negotiating with exporting nations in Geneva to extend import restrictions approved by the WTO that were originally supposed to have expired in 2012.
In April, the WTO said the Philippines had asked for a waiver of its commitment to open its rice market, with Indonesia, India, Vietnam and China supporting the request.
At that time, Thailand, Canada, Australia and the United States were still consulting with the Philippines on its request, the WTO said in a notice posted on its website.
Under the new deal, Serrano said the Philippines could buy up to 293,000 tonnes of rice with the 35 per cent tariff from Vietnam, with the same amount from Thailand; 50,000 tonnes each from China, India and Pakistan; 15,000 tonnes from Australia; 4,000 tonnes from El Salvador; and 50,000 tonnes from other exporters.
Rampant smuggling
High tariffs have been blamed for rampant smuggling of the grain into the Philippines, where prices in recent weeks have been 20 per cent higher than the same time last year after Typhoon Haiyan devastated key growing regions.
The government does not issue data on private rice imports, but traders have told Reuters that shipments this year would likely be well below 350,000 tonnes.
The state grains procurement agency, the National Food Authority (NFA), is allowed to import rice tariff free, however.
The Philippines has already bought a total of 1.3 million tonnes from Vietnam, the world’s No. 2 exporter of the grain after India, in deals over the last seven months. On Thursday, it said it would purchase another 200,000 tonnes of rice from the country.
The South Korean government, farmers and civic groups will be closely watching how the Philippines controls rice shipments, with Seoul set to decide whether it should shift away from a quota system on imports of the grain. — Reuters
