reGionAl oVerVieW HiGHliGHts AsiA PAcificfood Price And Policy monitor

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FAO Regional Office for Asia and the Pacific

AsiA PAcific

food Price And Policy monitor

August 2016 - Issue 32

food And reGionAl inflAtion

In the region, general inflation edged up 0.5 percent and food inflation rose 0.6 percent in July 2016 compared to June. Year on year, general inflation increased by 3.9 percent and food inflation was up 4.9 percent.

In Afghanistan, both general and food inflation rose by 0.7 percent in July compared to June, however general inflation was 7.4 percent higher than a year ago, and food inflation was up 8.7 percent over the same period. In Bangladesh, general inflation increased by 1.5 percent and food inflation by 2.1 percent, as higher prices were recorded for rice, pulses and vegetables (brinjal [eggplant], lady fingers and papaya). Year on year, general inflation increased 5.4 percent and food inflation was up 4.4 percent.

In China, general inflation rose by just 0.2 percent and food inflation fell by 0.2 percent in July compared to June. Year on year, general inflation rose by 1.8 percent and food prices were up 3.3 percent.

In Indonesia, general inflation was up 0.7 percent and food inflation was 1.1 percent higher than in June on higher prices for chicken, potato, rice, beef, spinach, apple, coconut and sugar. Year on year, however, general inflation rose by 3.2 percent and food inflation by 6.8 percent.

In the Philippines, general inflation inched up 0.1 percent and food prices by 0.2 percent. Samoa’s general inflation increased 1.8 percent and food inflation by 0.6 percent. Year on year, consumer prices were up 2.5 percent and food prices were up 7.4 percent.

In Pakistan, general inflation rose by 1.3 percent and food inflation increased by 2.7 percent compared to June. Year on year, general and food inflation were up 4.2 percent and 3.9 percent, respectively. Month on month, price increases were

Source: FAOSTAT, World Bank, and government statistics.

Note: The consumer price index (CPI) measures changes in the consumer basket of goods and services purchased by households. Regional estimates for the CPI are aggregated by a weighted geometric average of each respective national CPI and its corresponding regional GDP share (deflated by purchasing power parity estimates) as its weight. The regional index includes contributions from ten countries, comprising: Bangladesh, China, India, Indonesia, Pakistan, Philippines, Samoa, Sri Lanka, Thailand, and Viet Nam.

Note: Prices in US dollars (US$) are converted from local currencies using the

eggs (8.9 percent), pulse gram (5.6 percent), sugar (3.6 percent) and rice (1.2 percent).

India’s general inflation crept up 0.8 percent month on month, and food prices increased by 1.3 percent. Lower prices for chicken (down 5 percent), finger millet (4 percent), pearl millet (2 percent), tea (2 percent) and fish (1 percent) did not offset higher prices for gram (20 percent), fruits and

Food and general inflation (percent)

0 2 4 6 8 10 12

Jan 10 Apr 10 Jul 10 Oct 10

Jan 16 Apr 16 Jul 16

General CPI (annual change) Food CPI (annual change)

reGionAl oVerVieW

z In Cambodia, monthly prices for beef and pork were stable, but year on year prices declined 6.7 percent and 9.1 percent respectively as supply conditions improved.

z In China, prices for pork belly and pork rump were 15.9 percent and 13.6 percent higher than a year ago, respectively, because of lower supplies caused by heavy rains.

z In India, potato prices increased 3 percent from last month and 34.2 percent from last year due to reduced supply.

z The Myanmar Rice Federation and the Department of Agriculture are preparing a contingency plan for paddy in case of heavy rains.

z In the Philippines, the government asked the National Food Authority to consider importing an additional 1 million tonnes of rice in anticipation of a shortfall caused by La Niña.

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vegetables (7 percent), eggs (5 percent), maize (3 percent), barley (2 percent), beef, pork, wheat and rice (1 percent each).

Sri Lanka’s general inflation rose slightly at 0.2 percent and food prices were 0.6 percent higher than in June. Prices rose for eggs, fruits (banana, mango, papaya and pineapple), green chilies, chicken, chili powder, potatoes and gram. However, year on year, general inflation was up 5.5 percent and food inflation was 8.1 percent higher. In Thailand, month-on-month general and food inflation were 0.3 percent and 0.5 percent lower than in June. However, year-on-year food inflation in July was 1.8 percent higher. In Viet Nam, general inflation moved up 0.1 percent while food inflation fell by 0.1 percent.

Year on year, general inflation increased 2.4 percent and food prices by 2.6 percent.

food Prices

The FAO Food Price Index (FPI) was 0.8 percent lower in July compared to June, recording a 1.3-point fall for an average of 161.9 points, as decreasing prices in cereals and vegetable oils offset rising prices for dairy, sugar, and meat. The FPI was 1.4 percent below its July 2015 level.

The regional rice price index in nominal terms was up 1.1 percent compared to June and 1.3 percent higher than a year ago. In real terms, however, regional rice prices were 0.2 percent lower than June and 3.4 percent lower than at the same time last year. Nominal rice prices increased by 3.7 percent in South Asia (excluding India) and by 2.8 percent in India compared to June. In Southeast Asia nominal rice prices edged down 0.4 percent, while remaining stable in East Asia.

Year on year, nominal rice prices fell by 2.7 percent for India, and 0.8 percent for the rest of South Asia, but rose by 7.2 percent in Southeast Asia and 1.8 percent in East Asia.

Year on year, real rice prices declined by 9.5 percent in India, 5.6 percent in the rest of South Asia and 1 percent in East Asia, while increasing by 0.3 percent in Southeast Asia. Month on month, real rice prices increased by 2.6 percent in South Asia excluding India where prices were up 2.2 percent, but decreased in East and Southeast Asia by 1.8 and 1 percent, respectively.

The regional wheat price index in July was up 0.5 percent in nominal terms compared to June, and 4.3 percent higher than a year ago. Month on month, nominal wheat prices increased by 1 percent in India and 1.4 percent for the rest of South Asia, and prices inched up 0.1 percent for Southeast Asia, while decreasing by just 0.2 in East Asia.

Year on year, nominal prices were up by 6.9 percent in India and 2.2 percent for the rest of South Asia. Nominal prices also increased in East Asia by 3.2 percent, and to a lesser degree in Southeast Asia by 0.4 percent.

Real wheat prices in the region were down 0.9 percent compared to June, but remained stable year on year. Month on month, increases in prices were recorded in Southeast Asia at 2.7 percent, India at 0.6 percent and at 0.1 percent for the rest of South Asia. They decreased, however, by 2 percent in East Asia. Year on year, real wheat prices fell by 2.4 percent in South Asia excluding India, and by 0.1 in Southeast Asia, while slightly increasing in East Asia and India by 0.3 and 0.7 percent, respectively.

Source: FAO, International commodity prices

0 100 200 300 400 500 600 700

US$/Tonne

Wheat (US No.2 Hard Red Winter) Maize (US No.2 Yellow) Rice (Thai 100% B), 2nd grade

Global benchmark prices

Inflation adjusted (2007=100)

Nominal (2007=100)

Subregional price indices: rice

70 80 90 100 110 120 130 140 150

110 130 150 170 190 210 230 250

East Asia Southeast Asia South Asia (excl India) India Inflation adjusted (2007=100)

Inflation adjusted (2007=100)

Nominal (2007=100)

Subregional price indices: wheat

70 80 90 100 110 120 130 140

110 130 150 170 190 210 230 250 270

Jan 10 Apr

10 Jul 10 Oct 10

Jan 11 Apr

11 Jul 11 Oct 11

Jan 12 Apr

12 Jul 12 Oct 12

Jan 13 Apr

13 Jul 13 Oct 13

Jan 14 Apr

14 Jul 14 Oct 14

Jan 15 Apr

15 Jul 15 Oct 15

Jan 16 Apr

16 Jul 16

East Asia Southeast Asia South Asia (excl India) India Inflation adjusted (2007=100)

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food Prices

In Cambodia (Phnom Penh markets), prices for all the rice varieties monitored (Phkar Khney, Neangminh and mixed varieties) remained stable (not shown in figure). Despite a prolonged drought resulting from El Niño in 2015 and 2016, official estimates for aggregate rice production in 2015 were unchanged from 2014 at 9.3 million tonnes. Atmospheric conditions point to an early occurrence of La Niña, a climatic phenomenon historically associated with heavier rainfall in Cambodia. If this occurrence happens between July and September, La Niña could result in improved development of the main cereal season crops. Hence, the outlook for the 2016 paddy crop remains uncertain, depending on the performance of the monsoon rains from July onwards.

Domestic rice price stability has not translated into desirable conditions for rice exporters. In mid-August, the Ministry of Commerce (MoC) set up a new taskforce comprised of 13 members from the Ministry and 11 members from the Cambodia Rice Federation (CRF). The main objective is to achieve a shared responsibility with the Ministry issuing the certificate of origin to the rice exporters. This measure is expected to prevent false product labelling and strengthen rice quality control. It will complement another measure created in March in which the Ministry agreed to facilitate loans of US$ 20 million to US$ 30 million through the Rural Development Bank. As of August, those loans have been approved – but not yet disbursed – with an interest rate of about 7 percent. The intention is to enable rice millers and exporters to purchase rice from farmers to store in their warehouses to process and export.

Prices for beef and pork were stable on a month-to-month basis, but declined 6.7 percent and 9.1 percent, respectively, on an annual basis, which analysts attributed to improved supply. In early August, the Ministry circulated the framework of Cambodia’s first law regulating the quality of domestic and imported meat products and livestock. This law is expected to facilitate the increase in supply of live animals, particularly via imports, as more countries will be able to export live cattle to Cambodia. In addition, in 2014 the Government of Australia and the Government of Cambodia signed protocols allowing Australian live cattle imports to Cambodia. The first shipment of Australian cattle arrived in June. The opening of the first live-cattle feed lot and abattoir in Cambodia followed this event.

Prices for chicken were down 3.3 percent from last month, but were unchanged from a year ago. Prices for live fish were 3.3 percent and 9.4 percent lower than a month and a year ago, respectively.

Prices for soybean oil were unchanged from last month, but were 9.1 percent higher than a year ago. Cambodia is the largest soybean exporting country in the 10-member Association of Southeast Asian Nations (ASEAN). According to the ASEAN Agricultural Commodity Outlook, in 2015 Cambodia experienced a decrease in production due to reduced planted and harvested area.

Source: Ministry of Agriculture, Forestry and Fisheries, 2016

Source: National Bureau of Statistics, 2016 0

5000 10000 15000 20000 25000 30000 35000 40000 45000 50000

Jul - 15 Aug - 15 Sep - 15 Oct - 15 Nov - 15 Dec - 15 Jan - 16 Feb - 16 Mar - 16 Apr - 16 May - 16 Jun - 16 07-Jul-16 14-Jul-16 21-Jul-16 28-Jul-16

KHR/Kg

Beef Pork Live fish Chicken meat

5200 5300 5400 5500 5600 5700 5800 5900 6000 6100

KHR/Kg

Soybeans oil

0 2 4 6 8 10 12

Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 10-Jul-16 20-Jul-16 30-Jul-16

CNY/Kg

Cucumbers Potatoes Rapes

Cambodia

China

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In China (average of 50 markets), prices for rice (Japonica) and wheat flour (not shown in graph) were relatively stable from last month, registering annual price increases of 1.6 percent and 3.2 percent, respectively. The stability of rice and wheat flour prices reflects adequate availability from record production in 2015. Despite recent heavy seasonal rains, the 2016 paddy crop is forecast to reach record levels of 209.1 million tonnes, as flood-induced losses in southern provinces are expected to be offset by an increased output in non- flood affected areas in northeastern provinces. The China National Grains and Oils Information Centre estimated wheat production at 128.6 tonnes, which is 1.6 million tonnes lower than the 2015 level due to excessive rains and consequent pest outbreaks.

Month on month, prices for selected fresh vegetables were higher, with rapes up by 24.7 and cucumbers by 16.7 percent.

Year-on-year, prices for rapes were up by 7.1 percent, but prices for cucumbers were down by 5.9 percent.

Prices for potatoes were 17.5 percent and 7 percent lower than a month ago and a year ago, respectively.

Year on year, prices for fresh vegetables were down by 17.4 percent for Chinese cabbage, 16.1 percent for apples and 11.9 percent for tomatoes on improved supply. During the spring season, vegetable supplies were severely affected by cold weather, which led to higher prices. This situation encouraged growers to increase their vegetable planting areas during summer, which improved supply and consequently pushed the prices back down.

Prices for pork belly and pork rump (not shown in graph) were 15.9 percent and 13.6 percent higher than a year ago, respectively.

The recent rise in pork prices can be explained by reduced supply due to heavy rains. Despite earlier government efforts to stabilize the pork supply, the number of hogs decreased as floods affected a pork-producing region that covers one third of the total pork production in China. This time around the government has limited reserves to stabilize the market. This sudden reduction of supply is expected to continue pushing prices upward.

In India (Delhi markets), rice prices (not shown in graph) were stable over the past month, but 5.9 percent lower than a year ago. Wheat and wheat flour (atta) prices (not shown in graph) were 5.6 percent and 4.8 percent higher than a month and a year ago, respectively. Maize prices (not shown in graph) were stable over the past month, but were 11.1 percent higher than a year ago.

Prices for meat (not shown in graph) were up 21.3 percent from last year.

During July, prices for red lentils (masur) and green beans (moong) were relatively stable with masur rising 1.1 percent and moong falling 1.7 percent from June. Compared to a year ago, prices for red masur were down by 0.3 percent, but prices for moong were up by 6.4 percent.

Prices for eggplant (brinjal) and for whole and split gram have continued to rise since January. Month on month, prices for split gram were up by 37.3 percent, and whole gram by 26.6 percent, followed by a 17.6 percent increase for eggplant.

Source: Ministry of Agriculture and Farmers Welfare, 2016 Source: Ministry of Agriculture and Farmers Welfare, 2016

0 50 100 150 200 250 300 350

INR/Kg

Chicken Fish - Rohu 1Kg. Size Meat Source: National Bureau of Statistics, 2016

0 2 4 6 8 10 12 14 16

Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16 10-Jul-16 20-Jul-16 30-Jul-16

CNY/Kg

Chinese Cabbages Apples - Fuji Apple Tomatoes

China

0 20 40 60 80 100 120 140 160 180

INR/Kg

Pigeon peas (arhar) Green beans (moong) Red lentils (masur) Black lentis (urad)

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Annual prices increased 57.2 percent for black lentils (urad), 50 percent for pigeon peas (arhar), and 38.2 percent for sorghum (jowar).

Pulses are typically planted in un-irrigated areas, but this kharif (winter) crop has been supported by favourable weather conditions, high market prices and the government’s minimum support prices. These factors resulted in an increase in acreage from 6.47 million hectares to 9.08 million hectares. August and September will be critical to achieve forecasted normal yields.

Tomato prices increased 43.3 percent from last month, and 34.4 percent from last year due to a reduction on output.

Normally, tomato prices firm up in the off-season of June to September every year, but this sharp increase corresponds to a severe drought that damaged the rabi (spring) crop and resulted in reduced output. Prices are expected to decrease in late August, when the fresh crop enters markets.

Potato prices increased 3 percent from last month and 34.2 percent from last year due to reduced supply. In recent years, potato farmers have been suffering from instability in production because of weather and blight disease. In 2013- 14, production stood at 45.1 million tonnes. After a good harvest in 2014-15 at 45.9 million tonnes, farmers reported lower incomes after selling their crop at reduced prices (below their production cost). The lower price, combined with unfavourable weather prospects, discouraged potato farmers from planting the crop in 2015-16. This situation led to reduced output in 2016 at 44.1 million tonnes (estimated) and resulted in higher prices.

Last year, the central government responded to this situation by setting up a Price Stabilization Fund (PSF) with INR 5 billion (US$ 53.5 million), to help reduce the price volatility of onion and potatoes by procuring them directly from farmers. In February 2016, the central government decided to shift PSF to the Ministry of Consumer Affairs to protect consumers and allocated a budget of INR 10 billion (US$ 107 million).

Although India is the second-largest potato producer in the world, it exports less than 1 percent of its total output, as most of it is consumed domestically. Farmers usually sell their crop around March and November each year. When cold storage facilities are available, the surplus is stored and sold for export at the beginning of the following season for a better price. To ensure domestic supply and reduce price volatility, the government also set up Minimum Export Prices at US$ 360 per tonne in July for a short duration. This policy instrument aimed to calibrate the export volumes from the crop surplus to guarantee sufficient domestic availability In Myanmar (Yangon markets), rice prices were unchanged from last month but 25.8 percent higher than a year ago. FAO estimates the 2015 aggregate paddy output at 27.5 million tonnes, 3 percent lower than 2014’s reduced level. The drop in output was the result of a smaller seasonal harvest caused by floods in July and August 2015. Learning from past experience, this year the Myanmar Rice Federation and the Department of Agriculture are preparing a contingency plan for paddy in case of heavy rain. The contingency plan includes seeds and fertilizers distribution to farmers, but also monitors the water levels regularly in the Irrawaddy

Source: e-Trade Myanmar, 2016

Source: Ministry of Agriculture and Farmers Welfare, 2016 0

10 20 30 40 50 60

INR/Kg

Tomato Potato

Source: Ministry of Agriculture and Farmers Welfare, 2016 0

20 40 60 80 100 120

INR/Kg

Gram - Split Gram - Whole Eggplant (brinja)l

india

0 100 200 300 400 500 600 700 800 900

MMK/Kg

Rice Soybean Sugar

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Delta where a large proportion of aggregate paddy output originates.

Annual prices for soybean and sugar registered increases of 18.2 percent and 16.9 percent, respectively.

Prices of maize and wheat continued to decrease. Month on month, prices were down by 3.8 percent for maize, and down 2 percent for wheat. Year on year, prices dropped by 19.9 percent for maize and 15.2 percent for wheat.

In the Philippines (metro Manila markets), rice prices reported by the National Food Authority (NFA, not shown in graph) have remained unchanged since a year ago. Prices for commercial regular and well-milled rice (not shown in graph) were 5.3 percent and 4.8 percent lower than a year ago, respectively.

FAO forecasts that the aggregate paddy output in 2016 will be 18.7 million tonnes, which implies a 7 percent recovery from the 2015 level and close to the record amount in 2014. There is an expectation of a mild-case of La Niña in 2016, which could bring the aggregate paddy output down to the 2011 level. Because of this, the National Economic and Development Authority requested the NFA to consider a proposal to import an additional 1 million tonnes of rice in anticipation of a shortfall in production. The current inventories could provide sufficient rice for 101 million consumers for a period of 100 days.

Prices for cabbage (pechay), beans (habichuelas) and eggplant continued to move downwards with monthly decreases of 36 percent for cabbage, 28.6 percent for beans and 11.1 percent for eggplant. Annual plunges were also evident in a 31.6 percent decrease for beans, and a 26.6 percent drop for cabbage (pechay), followed by a 21.2 percent decrease for eggplant. The downward trend in prices can be explained by the improved yields in some planted areas for these commodities, an efficient use of fertilizer, and the expansion of planting areas.

Prices for tomatoes were 17.6 percent higher than a month ago, but unchanged from a year ago. The drop in prices from December 2015 to March 2016 can be explained by the improved production from efficient use of seeds and fertilizer, and an increase in planted areas. The recent increase in prices from June to July reflected a reduction in output due to a decrease in procurement by the Northern Foods Corporation (NFC). NFC has sponsored a large contract-farming scheme to grow tomato and other commodities.

Year-on-year, prices (not shown in graph) increased 68.8 percent for red onion, 66.7 percent for papaya, 36 percent for mango, 30 percent for white potatoes, 23.8 percent for string beans (sitao), 20 percent for banana (lakatan) and 16.7 percent for carrots. Reduced output for these commodities were caused by damage from Typhoon Lando (last year), as well as damage to seedlings caused by Typhoon Nona.

Insufficient moisture caused by intense heat reduced the white potato output.

Source: Samoa Bureau of Statistics, 2016 Source: Philippines Statistical Authority, 2016

0 20 40 60 80 100 120

PHP/Kg

Tomato Source: Philippines Statistical Authority, 2016

0 20 40 60 80 100 120 140

PHP/Kg

Eggplant Cabbage (pechay) Beans (habitchuelas)

Philippines

0 1 1 2 2 3 3 4 4

Jun - 15 Jul - 15 Aug - 15 Sep - 15 Oct - 15 Nov - 15 Dec - 15 Jan - 16 Feb - 16 Mar - 16 Apr - 16 May - 16 Jun - 16

WST/Kg

Taro Coconut Pumpkin

Samoa Philippines

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In Samoa, the volume of produce in local markets increased by an estimated 85 percent in June, driven by expanding supplies of tomato (781 percent), pumpkin (219 percent), and other staple food items. The timing of the increase comes at the end of the wet season, which typically runs from November to April.

While supplies of vegetables have increased in June, the Ministry of Agriculture and Fisheries estimates that Samoa still spends between four and five million tala (US$ 1.6 to 2 million) to buy vegetables (cabbage, lettuce, carrots, onions, tomatoes) from abroad each year. The Ministry plans to develop programmes over the next five years to support the mechanization of local farmers to further reduce the dependence on imported vegetables and improve access to affordable and healthy food options in the country.

Increased supplies during June also helped to push down overall prices in the local markets by 15 percent from May.

The decrease in local market prices was driven by falling prices for head cabbage (42 percent), Chinese cabbage (36 percent), and tomatoes (22 percent). Prices also decreased for staple root commodities such as taro (3 percent), ta’amu, or root vegetable (18 percent), and yam (20 percent).

Note: Month-on-month changes are calculated as the price average of the current publication month from the price average of the previous month. Year-on-year changes are likewise reported as the price average of the current publication month from the price average of the same month in the previous year.

Source: Samoa Bureau of Statistics, 2016 0

5 10 15 20 25

Jun - 15 Jul - 15 Aug - 15 Sep - 15 Oct - 15 Nov - 15 Dec - 15 Jan - 16 Feb - 16 Mar - 16 Apr - 16 May - 16 Jun - 16

WST/Kg

Tomatoes

Samoa

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Price forecAst

increase of 0.2 percent from April 2016, and an increase of 7.6 percent from the previous year. If prices follow normal seasonal patterns during the next three months, the model forecasts that retail prices for coarse rice are likely to increase gradually within a benchmark band of BDT 32.6 – 34.3 (US$

0.42 – 0.44) per kg.

Thailand (wholesale, rice)

per kg) a slight decrease of 0.3 percent from July 2016, and an increase of 14.8 percent from the previous year. If prices follow normal seasonal patterns during the next three months, the model forecasts that retail prices for wholesale rice are likely to increase gradually within a benchmark band of THB 11.7 – 14.1 (US$ 0.34 – 0.40) per kg.

Technical notes: The ESA Price Monitoring Model is a simple tool designed to assist policy makers, farmers and traders in assessing whether recent price trends are in line with those typically observed in the past. The purpose of the model is to determine whether short-term price movements of a commodity exceed a benchmark which takes into consideration seasonality, inflation and historic variability. The model uses only data on past prices and the consumer price index (CPI) to capture these characteristics.

It establishes an expected level of price for the following month along with a range of uncertainty generated by past deviations from expected prices. Price movements can be interpreted as “excessive” if prices fall outside the benchmark band. The difference between the actual price and the “benchmark price” (1 month in advance) that was

Wholesale prices for rice (25 percent broken) in Thailand were THB 13 (US$ 0.37) per kg in July, an increase of 0.3 percent from the previous month and an increase of 14.4 percent from July last year. The benchmark future price for August is forecast to be THB 12.9 (US$ 0.37) per kg (within a 70% benchmark band of THB 12.4 – 13.4 [US$ 0.36 – 0.38]

Bangladesh (retail, coarse rice)

Retail prices for coarse rice in Bangladesh were BDT 33.4 (US$ 0.42) per kg in July, an increase of 7.7 percent from the previous month and an increase of 6.9 percent from July last year. The benchmark future price for August is forecast to be BDT 33.5 (US$ 0.43) per kg (within a 70% benchmark band of BDT 28.3 – 29.3 [US$ 0.36 – 0.38] per kg) a slight

Source: FAO GIEWS and staff calculations, 2016

13.7 13.7 13.8 13.6 13.5

12.8 12.4

12.5 12.8 12.8

11.4 11.4 11.2 11.5 11.6 11.6 11.8

12.7 12.9 13.0

12.9 13.0 12.9

0 2 4 6 8 10 12 14 16

Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 (f) Jul 16 (f) Jun 16 (f) THB/kg

70% Band 90% Band

Average Past Prices Actual Prices

Projected Benchmark Price

38.2 37.7 38.1 38.7 38.5 37.6 36.9 36.2 36.5 37.1

31.3 30.4 29.4 30.0

29.4 28.2 26.5 28.5

31.0 33.4 33.5 33.5 33.5

0 5 10 15 20 25 30 35 40 45

Oct 15 Nov 15 Dec 15 Jan 16 Feb 16 Mar 16 Apr 16 May 16 Jun 16 Jul 16 Aug 16 (f) Jul 16 (f) Jun 16 (f) BDT/kg

70% Band 90% Band

Average Past Prices Actual Prices

Projected Benchmark Price

Retail price for coarse rice

Wholesale price for rice

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nAtionAl Policy deVeloPments

Production oriented policies

In August, Bhutan launched a state-owned farm machinery company to encourage mechanization in agriculture. Farm Machinery Corporation Limited (FMCL) will provide farm machinery goods and services to farmers at affordable prices. Besides the sales of machinery to the farmers, FMCL will provide repair and management services to the farmers.

The Government of India plans to launch a National Steering Committee and a Technical Committee to deal with issues related to livestock feed and fodder development in the country.

Pakistan is in the process of implementing the Plant Breeder’s Rights Bill 2016, with an aim to promote the development of new crop varieties, investment in research and plant breeding, and to safeguard the rights of new variety breeders. The Standing Committee of the National Assembly on National Food Security and Research passed the bill on 9 August. Under the bill, the Plant Breeder’s Rights Registry would be established in order to facilitate registration of new plant varieties and to manage and protect registered varieties.

In the Philippines, in order to increase production of fish and marine products, the Department of Agriculture announced it would distribute one million fishing boats to fishers around the country.

Sri Lanka’s Cabinet approved a fertilizer subsidy for tea, coconut and rubber smallholders who have cultivated land size of two hectares or less. LKR 15 000 (US$ 103) for the tea sector, LKR 9 000 (US$ 92) for the coconut sector and LKR 5 000 (US$ 34) for the rubber sector will be granted.

Trade and market policies

The Government of China announced the merger of two state-owned, grain-trading companies, namely China National Cereals, Oils and Foodstuffs Corp and Chinatex Corp. This merger aims to improve the stability of the nation’s grain market and to secure the national grain supply, as well as to get higher competiveness against international grain majors.

On expectations that public stocks of pulses will decrease further, the Government of India has decided to import another 20 000 tonnes of pigeon pea, 20 000 tonnes of chickpea, 10 000 tonnes of black gram and 80 000 tonnes of red lentil to increase buffer stocks.

The Cabinet of India approved the continuation of the production subsidy to sugar mills on the basis of actual export of sugar and supply of ethanol. This subsidy has been introduced to help mills make timely payments to sugarcane farmers and improve their liquidity. The sugar subsidy was disbursed on the basis of allocated targets in respect to sugar exports and ethanol supply. However, the recent decline of sugarcane and molasses production in the country due to drought prompted lowering such targets and changing the actual basis.

Indonesia eased its import regulations on meat products by allowing the importation of all kinds of bovine meat including offal. In the past, only certain bovine meat products were permitted for import.

The Ministry for Primary Industries of New Zealand announced new regulations to improve animal exports from the country, and the regulations came into force on 25 August. According to the announcement, the Ministry will have the power to demand reports on animal welfare for up to 30 days after arriving in importing countries. Compliance of exporters to the requirement will be taken into account when issuing future export approvals.

The Philippines, one of the world’s top rice buyers, plans to import one million tonnes of rice between this year and the next to secure supplies of the country’s staple grain.

The importation of 750 000 tonnes will be done through government-to-government deals, while the remaining 250 000 tonnes will be open to private companies.

The Government of Sri Lanka decided to buy 120 000 tonnes of paddy under the Paddy Purchasing Programme in this year’s Yala season, the period from May to the end of August. Procurement prices per kilogram were LKR 50 (US$

343 per tonne) for Keeri Samba paddy, LKR 41 (US$ 282 per tonne) for Samba paddy and LKR 38 (US$ 261 per tonne) for Nadu paddy.

Exports of Thailand’s fresh chicken to the Republic of Korea will resume after a 12-year ban due to outbreaks of Avian Influenza in 2004. The final inspection by the Korean quarantine authority will be conducted before the ban is completely lifted.

Consumer oriented policies

Australia plans to reform its imported-food safety system in order to avoid a similar situation where imported frozen berries caused hepatitis A virus infection in several people in 2015. The proposed reforms include strengthening border inspection and testing to identify unsafe food. Monitoring of emerging food safety risks and responding to emergency cases are measures also expected to be enforced.

In August, the Ministry of Agriculture and Rural Development in Viet Nam eased the quarantine requirement for egg products in order to reduce administrative procedures and to lower egg prices. Quarantine is still necessary for eggs exported overseas.

Sources: Policy developments for the Asia-Pacific region are collected by FAO from official and non-official websites. For Australia, Australian Government; for Bhutan, Ministry of Agriculture and Forest; for China, Ministry of Agriculture; for India, Press Information Bureau, Government of India and the Economic Times; for Indonesia, US Department of Agriculture; for New Zealand, Ministry for Primary Industries; for Pakistan, Ministry of National Food Security and Research and Business Recorder; for the Philippines, Department of Agriculture, PhilStar and Bangkok Post; for Sri Lanka, the Official Government News Portal of Sri Lanka and Lanka Business Online; for Thailand, National News Bureau of Thailand; for Vietnam, Viet Nam News.

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Contact information

Disclaimer and Acknowledgements

The Asia Pacific Food Price and Policy Monitor is prepared with information from official and non-official sources by FAO Regional Office for Asia and the Pacific. Conditions can change rapidly and information may not always represent the current food price situation as of the present date. As information is based on official and non-official sources, not all of them should be taken as official government views. The designations employed and the presentation of material in this report do not imply the expression of any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. The support of FAO Country Offices and FAO’s Food and Agriculture Policy Decision Analysis (FAPDA) are gratefully acknowledged for their contributions.

FAO Regional Office for Asia and the Pacific, Socio-Economic Development and Policy Support Group (SEDPS) 39 Phra Atit Road, Bangkok 10200, Thailand

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