Worst-case food price scenario deemed unlikely by Agri dep’t
THE Department of Agriculture (DA) said on Tuesday that the worst-case scenario for food prices of a 20%-60% rise is unlikely because it expects the oil price shock to be mitigated by government measures to cushion the blow.
In a statement, Agriculture Secretary Francisco P. Tiu Laurel, Jr. called scenarios that assumed a crude oil price of $200 per barrel for six months were based on “extreme assumptions” that did not factor in the impact of government intervention.
“The prices presented assumed the full impact of soaring crude,” Mr. Laurel said. “They did not factor in government action, which we will undertake to protect Filipinos from an oil shock.”
The DA had presented at a Senate hearing last week projections for the retail prices of key agricultural commodities, such as rice, meat, and vegetables, which it floated the possibility of a 20%-60% rise in the worst-case scenario.
The impact of fighting around the Strait of Hormuz has raised concerns over disruptions to the supply of fuel as well as fertilizer. The DA said about 30% of global urea trade and roughly 20% of ammonia and phosphate flows transit the strait.
The DA said, to mitigate potential fallout, the Department of Energy has procured crude from non-traditional sources, including Russia, while the Fertilizer and Pesticide Authority has been authorized to make emergency purchases of agricultural inputs.
It added that state-run firms such as Planters Products, Inc. can also be mobilized to import more fertilizer.
The DA said it is also exploring alternatives like organic fertilizer, including chicken manure, to reduce reliance on petroleum-based inputs.
While risks persist if oil prices remain high, the DA said agriculture is currently better positioned to absorb shocks than earlier thought.
“Despite global uncertainty, domestic indicators remain stable. Food prices have held broadly steady, pork inventories are sufficient, and broiler production is exceeding demand, easing farmgate prices,” the DA said. — Vonn Andrei E. Villamiel
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