In a statement, the Agriculture chief said that, while rice prices are projected to start declining in October, the most substantial drop will likely occur after the holiday season.
The tariff reduction, implemented through Executive Order 62 signed by President Marcos, lowered the tariff on rice imports from 35 percent to 15 percent, effective July 8, 2024.
The government hopes this move will ease the cost of rice, a key driver of inflation in the country.
Economic managers project that rice prices could fall by P5 to P7 per kilo as a result.
"Demand for food typically spikes in December, so we anticipate a more significant decrease in prices by January," said Tiu Laurel.
He noted that the initial impact of the tariff cut has been delayed as traders imported large volumes of rice earlier this year, anticipating shortages due to the El Niño dry spell.
From December 2023 to May 2024, rice imports surged, averaging 422,000 metric tons per month, which created an oversupply. However, import volumes decreased in mid-2024 before rising again in August, signaling the market’s adjustment to the new tariff regime.
With the recent drop in global freight costs and local palay prices stabilizing between P23 and P25 per kilo, the DA anticipates further price reductions in the coming months.
However, challenges remain as global rice prices are still influenced by high demand from neighboring countries and limited supply from major exporters like India.
The Department of Agriculture said it continues to monitor market trends to ensure that both consumers and farmers benefit from the tariff reduction.
