By Vonn Andrei E. Villamiel, Reporter
FOOD PRICE GROWTH is predicted to speed up within the second quarter, as higher oil prices begin to flow through into the costs paid by consumers via elevated transport and farm production costs, analysts said.
Danilo V. Fausto, president of the Philippine Chamber of Agriculture and Food, Inc., said prices and provide of food and agricultural commodities are prone to remain regular within the first quarter but could speed up afterward.
“This may pose an issue within the second quarter. Prices might be affected due to transport costs caused by increases in oil prices and fertilizer costs,” he told BusinessWorld via Viber.
Mr. Fausto said the surge in agricultural production costs, coupled with a weaker peso, will end in upward pressure on food retail prices starting next month.
Raul Q. Montemayor, national manager of the Federation of Free Farmers, said the impact of rising input costs can have a much bigger impact on the following harvest season, but consumers may already be feeling price pressures earlier as a consequence of market speculation.
“We are going to see the impact in the following harvest later this yr, although prices will begin to creep up before that as a consequence of speculation about lower output and better costs of production,” he told BusinessWorld via Viber.
The Philippine Statistics Authority reported price increases in various key food commodities in early March. Prices of well-milled rice and regular-milled rice rose 3.8% and a pair of% yr on yr, respectively.
It also reported higher prices for fish, including galunggong (round scad, 3.4%), tilapia (5.1%), and bangus (milkfish, 10%).
BMI, a unit of Fitch Solutions, said the Asia-Pacific region faces risks from food supply disruptions in the approaching months.
“Asia-Pacific economies now confront rising risks of physical shortages of not only energy in the shape of oil and gas, but additionally of fertilizers and — by extension — food possibly later within the yr,” it said.
BMI said fertilizer costs are already rising, with urea prices increasing roughly 25% because the onset of the war within the Middle East, and further increases are likely if the conflict grinds on.
The Gulf Cooperation Council is a key supplier of fuel-derived nitrogen fertilizers. BMI said as much as a 3rd of the worldwide nitrogen fertilizer trade might be disrupted by prolonged gas supply issues.
Such disruptions come at a critical time, because the Philippines, Vietnam, Pakistan, and Sri Lanka enter key planting seasons for rice and corn in April and May.
“The disruption coincides with key planting and fertilizer application periods across the region, potentially affecting yields if shortages persist through the growing season,” BMI said.
Mr. Montemayor said the Philippines has to organize starting midyear, particularly throughout the July to September period, when there might be minimal harvests.
“During this lean period, we have now no alternative but to depend on imports, and it can be influenced each by the provision and price of imports that might be affected by the Iran war,” he told BusinessWorld via Viber.
Mr. Montemayor said higher fuel and input costs could either raise production expenses or force farmers to reduce on key inputs resembling irrigation and fertilizer, which in turn could lead on to lower output and tighter food supplies.
Aside from crop-based commodities, the Department of Agriculture (DA) has said it expects tighter supply and better prices for fishery products by midyear as a consequence of rising fuel costs and the upcoming lean season.
“Straight away, our fishermen are still earning. But when fuel prices remain high by May or June, our fishermen may not give you the chance to fish, which could lead on to a shortage,” Agriculture Secretary Francisco P. Tiu Laurel, Jr. said.
As a contingency measure, the DA is prioritizing aquaculture, particularly tilapia and bangus, to assist stabilize supply.
“We’re pushing our aquaculture industry to seed more fingerlings this summer in order that by May or June, we can have an ample supply of fish,” Mr. Laurel said.
He also cited imports as a fallback option, with the DA recently approving imports of as much as 250,000 metric tons of fish starting August.