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Thursday, April 25, 2024

Government banks on imports to temper onion prices

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The Department of Agriculture (DA) greenlit the importation of 21,060 metric tons (MT) of fresh yellow and red onions to temper the commodity’s retail prices, which have skyrocketed to more than P700 per kilogram in recent weeks.

Senior Agriculture Undersecretary Domingo F. Panganiban issued a memorandum authorizing the issuance of sanitary and phytosanitary import clearances (SPSICs) for the importation of fresh yellow and red onions.

The memorandum was addressed to all Bureau of Plant Industry (BPI) licensed onion importers and was dated January 6.

In the memorandum, Panganiban said the importation program will be implemented “to address the supply gap prior to peak harvest in 2023 and to stabilize the continuous increase in the price of fresh onions in the market.”

The retail price of red onions in the market has been on a par or was even more expensive than meat products. Government monitoring reports showed that the retail price of red onion even peaked at P720 per kg last month.

“Importation of fresh onions is to stabilize the price in the market. Prices should be substantially lower than the SRP [suggested retail price] set by DA after the arrival of imported onions,” Panganiban said.

Under the importation program, the country will purchase 3,960 MT of fresh yellow onions and 17,100 MT of fresh red onions. The volumes were based on the country’s monthly per capita consumption.

The agriculture department has set a limit on the number of SPSICs that will be issued for every licensed onion importer. Only one SPSIC with a 25-MT volume for fresh yellow onion and two SPSICs (50 MT per SPSIC) for fresh red onion will be issued to all licensed importers during the issuance period, according to the memorandum.

The issuance of the SPSIC for imported onions resumed last January 9 and will end on January 13. In total, the BPI, which oversees onion importation, would issue a total of 163 SPSICs for yellow onions and 326 SPSICs for red onions.

“All applications for SPSIC beyond the last day of issuance shall be rejected. Only those applications for SPSIC within the prescribed period shall be considered regardless if target volume was reached or not,” the memorandum read.

All onion shipments must arrive in the country on or before January 27. Shipments that would arrive beyond January 27 would be considered by the government as “invalid” and will be sanctioned with a “return to origin” order.

“Ports of entry shall only be in Port of Manila-South Harbor, Port of Subic, Port of Cebu, Port of Davao, and Port of Cagayan de Oro,” the memorandum read.

“Importers who failed to utilize the issued SPSIC will not be eligible to apply for the succeeding issuances of SPSIC for fresh onion,” it added.

The agriculture department also ruled that imported fresh onions must be stored only in accredited cold storage facilities as indicated in their respective approved SPSICs.

The government will allow the transfer of imported onion stocks to a new or a different cold storage warehouse aside from the one indicated in the shipment’s SPSIC.

The DA is also prohibiting the sale of approved SPSICs.

Tweaks

Agriculture Assistant Secretary Rex Estoperez said the import volume was adjusted from the previous recommendation of 22,000 MT following the DA’s analysis of recent data.

Also, the deadline for the arrival of imports is one week ahead of the proposed schedule to ensure that shipments would not coincide with the main local harvest season of onions.

Estoperez said President Marcos Jr., who is concurrently the agriculture secretary, is well aware of the onion importation program. He said Panganiban sent a memorandum to Marcos to inform the chief executive about the matter.

“Definitely, they talked. [Undersecretary Panganiban] will not sign [this memorandum] if [President Marcos] has no knowledge of it,” he told reporters in an interview on Tuesday.

Estoperez said the government would come up with a mechanism to cap the retail prices of the imported onions. The government will collate and analyze all pertinent data on onion imports including the landed cost.

“We will do that. Local onion prices have a cap, therefore imported onions should also have a cap,” he said.

Estoperez said the government expects the price of imported onions to range from P150 to P200 per kg.

Onion inspection

President Ferdinand Marcos Jr. on Tuesday said he wants to bring down the rate of third party inspectors, who are conducting the screening for smuggled onions, which

will be sold in local markets.

During the Cabinet meeting last Tuesday, Marcos stressed the need to reduce the service fee of the said inspectors so the smuggled onions can be sold at a low price.

Currently, inspectors charge P5,000 per kilo, which is “much higher than the value of the onion,” according to the President.

In its latest price monitoring report, the Department of Agriculture (DA) said red and white onions are now being sold at P420 to P600 per kg in the National Capital Region (NCR).

“So that is our quandary. We are trying to negotiate with third parties to do the inspection. But right now we are still reviewing all of that,” Marcos said in a mix of Filipino and English.

Last Tuesday, the DA announced that authorities have seized another P78.9 million worth of smuggled agricultural products.

Among the confiscated goods were red and white onions worth an estimated P25.3 million.

Marcos said the smuggled onion must go through inspection to ensure they will be free from “transboundary diseases.”

He reiterated the government’s plan to sell the smuggled onions to bring down prices.

“Since there are so many [people] looking for smuggled onions, we are making an effort to release them to the market. Unfortunately we do not know the source of these onions. So they all have to be inspected. It cannot be random,” Marcos said.

“They really have to be very safe because if just one batch [of contaminated onion] is able to pass through [inspection], it will cause sickness,” he added.

Image credits: Nonoy Lacza

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