Philippine Rice Output May Decline More Than Estimated on El Nino Drought

Rice production in the Philippines may decline by a more-than-estimated 902,000 metric tons in the first nine months of the year, widening a production deficit in the world’s biggest importer.

Output through September will drop 8.3 percent to 9.994 million tons, down from 10.896 million tons a year earlier, as dry weather caused by El Nino parched crops, the Department of Agriculture said today. That compares with the 800,000 tons in losses forecast by the government in a worst-case scenario in February.

Higher losses will curb supply in the Philippines after sales from state stockpiles rose to a record 626,254 tons in the first four months of the year as politicians bought unsubsidized grain to distribute to voters during campaigning for the May 10 elections, according to National Food Authority data.

Lower supply and a larger-than-expected decline in output may prompt the government to return to the global market to replenish stockpiles, potentially pushing prices higher.

The state-owned National Food Authority and private importers bought a combined record 2.45 million tons of rice for this year’s supply, helping drive prices in Chicago to last year’s high of $16.27 per 100 pounds in December. The Philippines lost 1.38 million tons of its September-December rice harvest to storms.

‘Running Low’

National Food may return to the import market in September to buy between 150,000 tons to 200,000 tons to rebuild stockpiles after a firmer assessment of the September-December harvest has been made, Rakesh Singh, a rice trader at New Delhi- based Emmsons International Ltd., said by phone today.

“If they feel they are running low on stocks, they may enter the market in small quantities,” Singh said.

Rough rice for July delivery dropped 1.1 percent to $11.68 per 100 pounds in Chicago at 11:40 a.m. in Singapore. The most- active contract has slumped 22 percent this year.

“The dry spell caused by El Nino pulled down the area harvested and yields in the major producing regions of Cagayan Valley, Western Visayas, Northern Mindanao and Soccsksargen,” the government said in a statement today.

The nation’s corn output will likely decline 17 percent to 4.642 million metric tons in the first nine months of the year, from 5.591 million tons a year earlier, the government said.

To contact the reporter on this story: Luzi Ann Javier in Singapore at

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