By: Cristina Eloisa Baclig – Content Researcher Writer

MANILA, Philippines — The cost of producing and moving rice rose much faster than the price of the staple in June, creating a widening gap that could put pressure on farmers and other players in the rice supply chain even as retail prices remained relatively stable.

University of the Philippines Diliman associate professor and Inquirer data scientist Dr. Rogelio Alicor Panao based his finding on data from the International Rice Research Institute’s (IRRI) June 2026 Global Rice Market Brief, which showed the rice input-cost index at 143, compared with a rice-price index of 102.

“In other words, the cost of producing and moving rice rose far faster than the price of rice itself,” Panao said.

The resulting 41-point gap was the third-largest among the eight markets covered by the IRRI data, behind Indonesia at 46 points and Myanmar at 45.

The figures suggest that the price consumers see in the market does not necessarily reflect the costs incurred throughout the rice supply chain, Panao said.

Input costs rise faster

Panao said the gap was not driven by a shortage of rice but by higher costs of inputs and activities involved in producing and moving the staple.

“Fuel prices remained elevated after the March-to-May shock linked to the Middle East conflict, while fertilizer (urea) prices also stayed high,” he said.

At the same time, rice prices softened in May and June, which Panao said was presumably linked to the government’s P50-per-kilogram ceiling on imported rice under Executive Order No. 118.

The disparity between input costs and rice prices raises the question of where the cost is being absorbed along the supply chain, Panao said.

“The cost-price gap implies that the real cost of rice is being absorbed somewhere along the supply chain, likely by farmers through lower returns, as well as by millers, traders and transporters through thinner margins, and even by government through subsidies,” he said.

A wider gap

Panao said the increase in costs associated with producing and moving rice has outpaced the movement in rice prices, putting pressure on farmers, millers, traders and transporters, as well as the government.

He said the situation is significant because the price of rice at the consumer level does not necessarily capture the costs incurred throughout the supply chain.

“The price of rice, a daily staple for millions of Filipinos, may have stabilized. But a stable retail price does not necessarily mean a healthy market,” he said.

Beyond cheaper rice

Panao said the current system may be working for now, but a longer-term approach should look beyond bringing down the price paid by consumers.

“While the current system may be working for now, a forward-looking government should look beyond bringing cheaper rice to consumers and build a rice system strong and sustainable enough to feed Filipino families tomorrow,” he said.

Panao said the IRRI recommendations include stronger competition and closer monitoring of margins across the supply chain, along with targeted support when rising costs threaten production.

“This includes helping farmers adopt higher-yielding and climate-resilient varieties, improving access to credit and inputs, and using NFA procurement more strategically.” /dm

Published Date: August 27, 2026