Philippines fertilizer procurement delayed as weak peso raises import costs
The Philippines' agriculture department is revisiting procurement plans after the weak peso pushed up the cost of imported fertilizer and disrupted orders. The pressure is also set to lift private-sector rice import costs, with November shipments expected to affect retail prices as the country offsets El Niño-related production losses.
Highlights
- Department of Agriculture deferred fertilizer orders as weak peso raised import prices from P1,500 to P2,800–P2,900, exceeding approved budgets.
- Rice import costs are rising due to exchange rates, with November shipments likely to boost retail prices amid additional imports to offset El Niño impacts.
- Philippines could exceed 5 million metric tons of rice imports this year, after losses of 900,000–1 million metric tons in palay production and 4.36 million tons already imported as of Oct. 22.
Procurement budgets revised amid rising import prices
As reported by BusinessWorld Online, the Department of Agriculture said fertilizer orders have been deferred or rescheduled because exchange rate weakness has raised import prices beyond previously approved contract budgets.At a briefing, Assistant Secretary Arnel B. de Mesa said the department's fertilizer procurement has been disrupted after costs climbed sharply, with prices that were once around P1,500 now reaching P2,800 or P2,900. Fertilizer is a core part of the department's relief packages for farmers and fisherfolk, alongside seed and subsidized fuel.
Rice import costs set to climb
De Mesa said imported rice shipped by the private sector is also becoming more expensive, with November arrivals likely to feed through to retail networks. Additional imports are expected in the coming weeks to compensate for lower domestic output during El Niño.He said estimated losses to palay, or unmilled rice, production will be about 900,000 to one million metric tons. The Philippines may soon exceed 5 million metric tons of rice imports, after volumes reached 4.36 million metric tons on Oct. 22.
In our earlier article on the surge in crude oil tanker shipping costs, we explained how conflict-related risks and route disruptions have driven freight and insurance rates sharply higher. We noted that these elevated transport costs are increasingly feeding into fuel prices and, in import-dependent markets, can spill over into broader consumer inflation through higher logistics and input costs.
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