Chiz says with tariff, imported rice to land a dangerous price

Press Release
By Office of Senator Chiz Escudero
April 10, 2008

PASAY CITY, Philippines  –  At 50 percent tariff, imported rice will land here at P50 per kilo that is if rice can still be found abroad after rice exporting countries curbed foreign sales to put a lid on inflation and the political turbulence that high food prices can cause.

Sen. Chiz Escudero based his computation on a $795 per metric ton price of rice, which was how much the widely-traded Thai grade B rice fetched last week, and yesterday's 41.75 to 1 close of the peso-dollar exchange.

Using these assumptions, rice will already cost P31.19 a kilo at source, and a 50 percent tariff will bring up its price to about P49.80 a kilo, Escudero said.

A metric ton of rice is 1,000 kilos.

"Wala pang handling fee, hauling and storage charges. And zero profit, which means traders, will be bringing in rice out of sheer patriotism," he said.

"If all of the above will be factored into the retail price, plus a little mark-up for the tindera, then we are looking at P52 per kilo. Ito yung amount na hindi lang moderated greed pero zero greed na," he said.

Even if the tariff is reduced to 30 percent, the end price of P43.15 would still be beyond the reach of ordinary Filipinos.

A P50-kilo rice, Escudero warns will "overnight create a nation of Katipuneros, with one rallying cry: Dapat ng kalusin ang gobyernong gumugutom sa atin."

Escudero was referring to a Filipino phrase, popularized by the movie line – Kapag puno na ang salop, dapat ng kalusin – uttered by  the late Fernando Poe, which literally means removing  by one swift sideway motion excess rice from an old rice measuring  box.

P50-kilo rice would also mean that a minimum wage earner will have to work three hours a day to meet his family of six's s daily rice needs.

To augment rice stocks, government has decided to import as much as 2.4 million metric tons this year, which it now wants private traders to undertake, breaking a state stranglehold on rice imports.

But that is, if surplus rice can be found from traditional net rice producers like Vietnam and   Thailand, Escudero said.

Citing wire reports, Escudero said Egypt, China, Vietnam and India, which make up more than a third of world rice exports, restricted sales this year.

The Vietnam Food Association has asked members to stop signing export contracts through June. China, whose 19.4 million hectares of land had been hit by drought, slapped a 5% tax on exports in the beginning of the year. Egypt imposed a rice export moratorium through October.

In Thailand, Prime Minister Samak Sundaravej has sought to calm panic buying, as people stockpile rice amid soaring global prices, which have sparked fears of shortages.