Rice crisis in the Philippines sounds a global inflation alarm
- Rice inflation in the Southeast Asian nation increased at the fastest pace in almost five years in August
- India’s restrictions have upended the market and prompted worried nations to secure supply as they try and contain the rising cost of rice
Rice inflation in the Southeast Asian nation increased at the fastest pace in almost five years in August, reviving memories of a 2018 shock that led to the end of a two-decade-old limit on imports.
The Philippine central bank warned this week that it was ready to resume monetary tightening if needed, while diplomacy and deals reign elsewhere as other countries rush to secure supply.
“We’re seeing a great deal of uncertainty,” said Shirley Mustafa, an economist at the United Nations’ Food and Agriculture Organization. “Price pressure is being exacerbated by the restrictions.”
Finance Undersecretary Cielo Magno said she would resign after a Facebook post that appeared to question the recently implemented price cap. The limit was imposed earlier this month after an “alarming” increase in retail costs.
Supply security is at the top of the agenda for many consumers. Philippine President Ferdinand Marcos Jnr and Vietnamese Prime Minister Pham Minh Chinh met on the sidelines of the Asean summit in Jakarta and are planning a five-year deal. Senegal is making diplomatic overtures to India, taking similar steps to other nations including Guinea and Singapore to ensure supply.
Other nations are taking steps to stem rising costs. Malaysia has implemented a purchase limit and started checks on wholesalers and commercial millers after allegations that local grain was being sold as imported rice at a higher price. Myanmar has also imposed a mandatory system to record volumes of stored rice to control domestic prices and deter speculation.
Some heat came out of the market this week with Asia’s rice benchmark dipping slightly, but prices are still near the highest level since 2008.