A leading Indian-American agricultural economist and award-winning global food innovator has highlighted the policy shifts in India and the Philippines in late 2024 as game changers in the global rice market landscape.
Samarendu Mohanty, recognized last year by the World Food Prize Foundation as one of the Top Agri-food Pioneers worldwide and a specialist in international development and rural livelihoods, wrote that India’s decision to lift its long-standing export restrictions and the Philippines’ implementation of a maximum suggested retail price on imported rice have combined to pull global rice prices down from recent highs.
“These concurrent policy changes created a perfect storm that ultimately stabilized and transformed rice markets worldwide,” Mohanty said. He pointed out that within months of these shifts, world rice prices declined by 18 percent and appeared headed for further softening early this year.
Indeed, after rising to levels not seen in decades, rice prices have now fallen to their lowest in over two years and continue to decline. Clearly, the influence of these two Asian countries on global rice pricing is undeniable—India is the largest rice exporter, and the Philippines is the largest importer.
Mohanty explained that India’s decision is understandable, given record domestic production resulting from favorable monsoon conditions and mounting pressure from farmers facing depressed local prices.
In the Philippines, Mohanty underscored the “aggressive market reforms” under Agriculture Secretary Francisco P. Tiu Laurel, which include strict law enforcement against hoarders and price manipulators, direct importation to supplement market supply, and technology-enabled monitoring of rice stocks and movements.
“The Philippines had long struggled with rice price volatility, with urban consumers often paying significant premiums due to supply chain inefficiencies and market manipulation,” Mohanty wrote.
“What market analysts soon termed the ‘Laurel Effect’ proved remarkable in its impact. By targeting unnecessary artificial demand created by speculation and hoarding, the Philippines’ approach created a ripple effect throughout Asian rice markets,” he added.
Mohanty further explained that as the Philippines’ import requirements have become more predictable and rational, “price speculation has diminished across the region.”
Earlier, Secretary Tiu Laurel indicated that there may be room to further reduce the maximum suggested retail price (MSRP) to P45 per kilo before the end of March, in light of still-softening global prices and the strengthening peso. ### (Photo by DA-AFID)
