El Nino may force Manila and Jakarta to import rice
El Nino may force Manila and Jakarta to import rice
MANILA (Reuter): The El Nino drought sweeping through the Philippines and Indonesia may force both countries to import rice at a time when they are gearing up for presidential polls in 1998, dealers and analysts said on Friday.
The grain is the staple food of the 200 million people in Indonesia and the 70 million Filipinos. Both governments are acutely sensitive to the need to be self-sufficient in rice and prevent politically embarrassing shortages of the commodity.
Manila may soon start buying up to 400,000 tons of rice from its neighbors to boost stocks and make up for the shortfall that may be caused by the El Nino weather pattern.
"Rice is a political crop," a senior dealer at a trading house in Manila told Reuters.
"Whatever preparations the government does now to mitigate prospects of a drought later in the year will bring more votes to whoever President Fidel Ramos will appoint as his candidate in next year's presidential elections," the trader said.
A dealer in Singapore added: "(President) Soeharto would not want any problems from the rice crop if it is hit by El Nino ahead of the elections. The same can be said for Ramos in the Philippines."
Traders said the Indonesian government was expected to be vigilant over the country's rice situation, especially with the presidential elections slated for next March.
"I don't think the government will take any chances. It will ensure prices are right and supply is ample," one dealer in Indonesia said.
Scientists have said the El Nino episode developing this year may be the worst this century and could rival the one in 1982/83, which killed an estimated 2,000 people and caused billions of dollars in damage.
It is caused by an abnormal warming of the Pacific ocean off the coast of South America and disrupts world weather patterns. The 1982/83 El Nino caused withering droughts in the Philippines, Indonesia, Australia, Papua New Guinea and South Africa.
A Philippine Agriculture Department official said Manila will likely begin buying rice soon.
"Our traditional rice suppliers, Thailand, Vietnam and China, have expressed interest to supply our needs," the official said, adding suppliers from India and Pakistan also made offers.
"The government should anticipate our requirements and decide to import rice once the requirement is determined as soon as possible," a Filipino businessman said.
"We should not wait for the occurrence of late import decisions as in late 1995, forcing people to line up for rice supplies in the country due to a shortage."
A severe rice shortage in 1995 led to a spike in inflation, which remained in double digits for seven months beginning in September of that year.
Philippine Agriculture Secretary Salvador Escudero said 43 percent of rice-producing areas and 25 percent of corn lands are vulnerable to a prolonged dry spell.
Indonesia is also in the same fix and may have to import rice by the end of this year.
"Although it has ample stocks at the moment, any delay in planting rice because of a prolonged drought will see stocks running out fast," one dealer with a trading house said.
"If the drought is prolonged, I see the possibility of Indonesia entering the market in the fourth quarter of this year," the trader said, adding that import volumes would depend on how the weather progressed.
State logistics agency chairman Beddu Amang said on Wednesday the agency had rice stocks totaling some three million tons, and there were no immediate plans to import.
"Stocks are sufficient at the moment, and enough until the next harvest," he said. Planting takes place in September.
"If there is an emergency or the harvest is delayed by one or two months, we will see then if there is a need to import rice. But at the moment there are no plans" to do so.
The government is planning to seed clouds in a bid to reduce the impact of the drought on food crops.