Philippine rice import outlook mixed as El Niño, fertilizer costs cloud demand

Philippine rice import prospects for 2027 remain mixed, with front-loaded purchases and strategic stockpiling providing a supply cushion, while intensifying El Niño risks and elevated fertilizer costs could weigh on domestic production, market participants told Platts, part of S&P Global Energy, Oct. 7.

The resulting stock cushion could temper Philippine rice import demand in early 2027, but a sharper-than-expected hit to domestic production from El Niño and high fertilizer costs could quickly revive buying interest.

Philippines Agriculture Secretary Francisco Tiu Laurel Jr. told Platts that the Philippines could see its 2027 (January-December) rice import requirement return to around 4 million metric tons, plus or minus 5%-10%.

The Philippines had already received around 4.3 million mt of imported rice as of Oct. 6, with another 900,000-1 million mt contracted and on the way, Laurel said.

Imports in 2026 are expected to be higher than in previous years, as the government has front-loaded purchases and quietly undertaken strategic buffer stocking, leaving the Philippines with sufficient supplies to manage potential El Niño effects through April 2027, according to Laurel.

"Our harvest season is still ongoing and looks okay," Laurel said, adding that dams that had been expected to face depleted water levels were replenished by around 30 consecutive days of heavy monsoon rains, bringing water levels close to maximum in key planting areas in Luzon.

The stock build could limit the Philippines' immediate import requirement in 2027, although the extent of El Niño-related production losses remains a key uncertainty for the market.

Market participants have differing views on the outlook for 2027 imports. A local rice buyer expects imports to increase by around 30% under controlled importation as El Niño approaches, while a second local importer expects imports to remain at similar levels to 2026.

S&P Global Energy CERA expects the Philippines to produce 12.35 million mt of rice for the marketing year 2025-26 (July-June), stable from the previous year, while imports are projected at 5.6 million mt, up 28.7% from the previous marketing year.

High fertilizer costs add to production risks

High fertilizer costs and El Niño have further strained farmers and weighed on domestic food production, particularly rice, the Department of Agriculture said Oct. 6, as food inflation accelerated to 6.8% in September from 4.6% in August.

The national weighted average retail price for prilled urea rose 34% year on year to 2,290 Philippine pesos/bag on Oct. 2, while granular urea increased 38% to 2,277 Philippine pesos/bag on Sept. 25, according to the Fertilizer and Pesticide Authority. Among other fertilizers, diammonium phosphate prices rose 12.7% year on year to 2,927 Philippine pesos/bag, while muriate of potash was stable at 1,658 Philippine pesos/bag.

"Market activity for key fertilizers such as urea, phosphate and potash has been very limited due to mounting cost pressures on local farmers," a Manila-based fertilizer buyer said.

Rice, corn and sugarcane were among the crops most affected, the buyer added.

"While distributors generally view current retail fertilizer prices as reasonable, smallholders and local farmers continue to regard them as high, as elevated diesel costs and interest charges have been passed down the supply chain to end users," a second Manila-based fertilizer buyer said.

Additionally, El Niño-driven dry weather is posing further challenges to the fertilizer and agricultural sectors.

"Eastern and southern parts of the country have been dry and received below-normal rainfall, which discouraged the need for fertilizer application," the second fertilizer buyer said.

The phenomenon is expected to intensify into a "very strong" El Niño between the September-December 2026 season and persist through the first half of 2027, the Philippine Atmospheric, Geophysical and Astronomical Services Administration said in a Sept. 23 press release.

"Prolonged rainfall deficits increase the risk of severe agricultural dry spells and water supply, threatening domestic food security," the agency said.

All provinces could face drought conditions by March 2027 as El Niño intensifies, Science and Technology Secretary Renato Solidum Jr. said in an Oct. 5 statement.

Platts last assessed CFR Philippines urea at $490/mt on Oct. 1, up $10/mt week over week, and assessed CFR Philippines standard muriate of potash at $410/mt on Oct. 6, stable on the week.