Agri trade deficit widened in Q1
MANILA -The Philippines’ agricultural trade deficit widened in the first quarter as key farm exports, such as coconut, banana and seafoods, slumped at a double-digit pace.
The Philippine Statistics Authority reported that the agricultural trade deficit had reached $2.81 billion in the first three months, up 10.2 percent from $2.55 billion in the same period a year ago.
“Philippine agricultural exports consist mainly of coconut and banana products plus shrimp and tuna. These three subsectors faced challenges to production [in the fourth quarter of 2022] and [the first quarter of 2023], which could have resulted in softer exports overall,” said Nicholas Antonio Mapa, ING Bank senior economist.
“We will need to see agricultural output improve, accompanied by renewed global demand to see a recovery,” Mapa said.
Agricultural exports declined by 20.8 percent to $1.55 billion while imports were larger at $4.36 billion, albeit down by 3.3 percent. Total agricultural trade amounted to $5.9 billion in the first quarter, a decrease of 8.6 percent from the past year.
“The wider agricultural trade deficit on a year-on-year basis may have to do with further reopening of the economy towards greater normalcy with no more large-scale lockdowns since 2022 and with the further resumption and pickup in local and foreign tourism since February 2022 and further easing of restrictions on foreign tourism thereafter (group tours from China resumed since the latter part of January 2023) — all of which contributed to some pickup in agricultural imports,” said Rizal Commercial Banking Corp. chief economist Michael Ricafort.
Ricafort said the relatively higher prices of agricultural commodities worldwide in recent months had partly reduced the demand for agricultural imports and exports.
The risk of El Niño drought in the Philippines and other Southeast Asian countries, said Ricafort, could reduce domestic palay production and force the country to import more rice.
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The spread of African swine fever to more areas in the country and the extension of reduced tariffs on vital imports would lead to the continued influx of imports and a wider agricultural trade deficit, he added.
During the period, the top 10 commodity groups contributed $1.5 billion or 96.8 percent of the total agricultural export revenue, down by 20.6 percent.
Edible fruit and nuts, and peel of citrus fruit melons took the lion’s share with 28.4 percent or $439.51 million. Commodities worth $165.42 million were shipped to Southeast Asia, with Malaysia as the leading buyer of agricultural exports.
Agricultural goods delivered to the European Union (EU) totaled $380.74 million, mostly to the Netherlands. Meanwhile, the statistics agency pegged the value of top 10 commodity groups sourced abroad at $3.71 billion or 85.1 percent of the total import revenues. Cereals accounted for $916.94 million or 21 percent.
The country procured $1.47 billion worth of agricultural goods from Southeast Asia, mostly from Indonesia. It also purchased $411.51 million of commodities from EU nations, with Spain as the top supplier.
– Jordeene B. Lagare
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