There’s nothing shocking or surprising about the wider agricultural trade gap in the second quarter of 2024.
Because of El Nino, low water supply and confusing policies on rice and other food crops from the Department of Agriculture (DA) – with the new leadership focused more on announcing his new plans rather than implementing existing ones– production took a hard blow and naturally imports had to cover for the widening supply shortfalls.
The country’s agricultural trade deficit ballooned by 13.8 percent to $3.07 billion in April to June from just $2.7 billion the year before.
Imports grew by 14.1 percent to $4.94 billion while agricultural exports reached $1.86 billion in the same period from $2.7 billion from the previous, reported the Inquirer, adding that this brought the total agricultural trade to $6.8 billion, up 13.8 percent on account mostly of imports.
Retired Prof. Roy Kempis of the Pampanga State Agricultural University said the growth of exports was trailing behind imports due to challenges in the global market, the Inquirer noted.
“The rest of the world seems slow in acquiring Philippine agricultural export products. Then the US is not even mentioned in the PSA (Philippine Statistics Authority) report. For the Philippines, the doors to these markets appear to be a challenge,” Kempis said.
Chief economist Michael Ricafort of RCBC said the latest figures were “partly attributed to lower base/denominator effects and as the economy reopens further towards greater normalcy with no more COVID restrictions” since July last year.
“Higher agricultural imports and exports could also reflect some pickup in global commodity prices during the period due to the El Niño drought/heatwave that reduced output and increased world prices of rice and other food/agricultural commodities,” the paper quoted Ricafort.
Among major commodity groups, cereals topped the list of agricultural imports with a share of 26 percent or $1.28 billion of the total, Inquirer said.
The Asean region shipped $1.86 billion, with Vietnam emerging as the leading supplier of imported goods followed by the European Union (EU) countries– primarily Spain– supplying $450.29 million worth of agricultural produce.
The country exported mostly edible fruit and nuts, peel of citrus fruit or melons, equivalent to a share of 29.2 percent or $543.62 million.
Exports to Asean countries amounted to $227.24 million, with Malaysia as the leading destination of agricultural commodities.
The shipment of food items to European nations stood at $358.93 million, primarily delivered to the Netherlands.
Ricafort said reducing duties on imported rice could encourage more imports of the staple food, also to preemptively increase local supply to prepare for the La Niña phenomenon later this year.
“For the coming months, risk of La Niña would be a consideration in terms of storm/flood damage that could cause some disruptions and crop and other agricultural damage,” he added.
Kempis said the focus should shift to increasing the production of animal and vegetable oils, as well as edible fruits and nuts, to boost exports.
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