Striking the Balance: Philippine Rice Policy between Farmers’ Livelihoods, Consumer Welfare, and National Self-Sufficiency Alisher Mirzabaev and Jeremy Zwinger IRRI Global Rice Market Brief Series - Issue#2 - September 2025 Africa in a buyer’s market: Why African rice prices are high despite cheaper world prices IRRI Global Rice Market Brief Series - Issue#7 - January 2026 Alisher Mirzabaev Bethelhem Legesse Debela Valerien Pede 1 IRRI Global Rice Market Brief – Issue #7 – January 2026 Alisher Mirzabaev, Bethelhem Legesse Debela, Valerien Pede Africa in a buyer’s market: Why African rice prices are high despite cheaper world prices Highlights: • International rice prices are still low, but not in a straight-line decline anymore. Global rice prices were historically weak throughout 2025, but they show signs of stabilization in January 2026. • More affordable imports are an economic benefit for African consumers. However, some African markets show elevated prices. • The main issue is a large gap between import costs and retail prices driven by: (i) foreign exchange scarcity and exchange rate pass-through; (ii) import duties and administrative costs; (iii) inland logistics and security costs; and (iv) market structure and pricing practices. • “Buy and store more” is not a safe option in Africa as rice storage capacity remains a challenge. Expanding reserves without adequate storage, financing, rotation, and governance can amplify losses and distort markets. A layered approach, involving small emergency buffers, with rules-based procurement, crowding-in private storage, and transparency is more robust. Africa in the current global rice market context: Global market conditions in recent months have been broadly favorable for importers, but they are no longer moving in a single direction. International rice prices dropped to a multi-year low in 2025, then began to edge upward in December 2025. This has been attributed to an anticipated recovery in import demand from the Philippines1 and government-to-government sales discussions in Thailand2. This is important for African markets because it means the current “low-price window” should be treated as an opportunity for targeted risk management. The transmission of domestic prices across African nations has shown variability, with certain markets experiencing weak or delayed responses. In many instances, retail prices have remained elevated in local currencies, even in the face of declining export quotations. During this time, some African governments have taken steps to actively manage prices downward. For example, in Senegal, the government has announced a price cap of 300 CFA/kg for imported broken rice, 2 set to take effect in 2026, marking a reduction from the current domestic price level of approximately 350 CFA/kg3. A crucial inquiry for rice policy across African countries revolves around understanding why the adjustment from border prices to wholesale and retail prices is frequently inconsistent, gradual, and at times asymmetric. There are several explanations for what is happening in African rice markets now: Import regulations and tariffs: trade policy and administrative costs prevent full transmission. When tariffs have set minimum levels, the domestic system can absorb a significant portion of any drop in international prices. Kenya illustrates this mechanism clearly: under the East African Community duty framework, rice imports are charged at the higher of an ad valorem tariff (35%) and a specific USD-per-ton minimum (USD 200/MT)4. When the specific minimum is binding, a fall in world prices does not translate into an equivalent fall in Kenya’s landed cost, so retail prices decline only modestly. This trade policy mechanism protects Kenyan rice growers, but consumers might see limited gains from lower international rice prices unless the government temporarily relaxes the floor or adjusts the duty structure. Foreign exchange rates, currency availability, and inland distribution costs: Inland logistics and security costs often surpass the impact of ocean freight, particularly for inland consumption centers. This point becomes even clearer in the current environment of decreasing freight costs: Drewry’s World Container Index reported a 10 percent week-on-week decline to USD 2,212 per 40-foot container on 22 January 2026, with expectations of further declines in coming weeks5. In Nigeria, even if landed costs at Lagos ease as international quotes and freight rates soften, the delivered price in inland markets (e.g., Kano and other northern hubs) is heavily shaped by domestic trucking costs, road conditions, security risks, and various other transaction costs along the corridor. In this setting, a decline in international quotes does not mechanically translate into lower retail prices, because the binding constraints are domestic distribution costs and risk premia. Moreover, foreign exchange conditions and exchange rate pass-through dominate the context. Even if rice is cheaper in US dollar terms, landed prices rise in local currency when currencies depreciate, when foreign currency is rationed, and when importers face delays and higher costs securing letters of credit. Concentrated import/wholesale logistics: market structure and pricing practices can slow pass-through even without assuming illegal collusion. Madagascar is relevant because imported rice can quickly become a large share of market supply during shortfalls; in 2025, rice imports rose sharply per available trade reporting. During these periods, a small group of major importers and wholesalers can play a crucial role in ensuring domestic availability. Prices may 3 adjust unevenly, rising quickly when landed costs increase but falling slowly when costs decrease. This phenomenon is influenced by factors such as inventory valuation, financing constraints, and limited competitive pressure at critical points, including import procurement, port handling, and wholesale distribution. This is why price monitoring and margin diagnostics are essential complements to any stabilization policy. High retail prices do not by themselves prove ‘price fixing’. However, if landed import costs fall, and wholesale and retail prices do not adjust for several weeks, the implied marketing margin is expanding, which indicates weak competition or other frictions in the import-to-retail chain and warrants margin monitoring and regulatory scrutiny. What this means in the near-term differs by country. In Senegal, the announced cap of 300 CFA/kg for imported broken rice from 2026 signals a government choice to trade off parts of the marketing margin and/or fiscal space to reduce living costs. The policy risk is implementation: a cap below sustained landed costs can induce shortages, quality downgrading, or leakage. The policy safeguard is transparency on how the cap aligns with import costs and disciplined monitoring of stocks and market availability. In Kenya, the relevant “this-cycle” mechanism is the tariff instrument. When import duties contain a binding specific floor, the pass-through of lower world prices is mechanically dampened. In this setting, a credible short-run option is not an open-ended waiver but a time- bound adjustment linked to international reference prices, paired with an explicit sunset clause and harvest-season safeguards. The aim is to convert a temporary global low-price window into real consumer relief without eroding the predictability that domestic producers require. In markets where foreign currency scarcity and domestic corridor costs dominate, the policy lever is different. Nigeria is commonly characterized by a large “wedge” environment where foreign exchange access, administrative frictions, and distribution costs matter as much as border prices for retail outcomes. The appropriate policy response in such settings is not simply 4 “import more,” but to reduce the non-price wedge: streamline port-to-market logistics, reduce administrative barriers and discretionary costs, and improve transparency in import and wholesale pricing. Finally, for countries that manage imports administratively through permits or quotas tied to domestic supply triggers, the immediate driver of prices is often domestic harvest outcomes and the governance of the permit system. The key reform is transparency: publish the trigger criteria, allocations, and expected timelines to stabilize markets without creating rents and uncertainty. Will low world prices trigger large-scale rice stockpiling in Africa? In the current environment, the answer must be conditional. “Storage capacity” is not just warehousing volume; it includes financing, quality control, fumigation and pest management, and most importantly, rotation and governance. Without these, buying large stocks during a low-price window can create fiscal exposure and high physical losses while distorting incentives for domestic producers. The policy-relevant approach for the next three to six months is therefore layered rather than maximalist: a modest, well-managed emergency buffer (with explicit rotation rules), complemented by instruments that crowd in private storage (warehouse receipt systems, credit lines, quality standards), and by transparent, rules-based release triggers that prevent ad hoc interventions from amplifying volatility. Structural actions to balance market stability and grower incentives in the long run would include: • Diversifying procurement risk. Although current market conditions have low rice prices, which makes it tempting to source rice from a few exporters, having a diverse mix of suppliers for rice will be beneficial. This way, countries can manage supplier concentration, procurement risk, and reduce exposure to future policy shifts. • Lowering the “domestic cost wedge.” Investments into increasing rice yields, improving input use efficiency, milling efficiency, drying, grading, and reducing logistics costs often deliver bigger long-run competitiveness than border measures. • Differentiating local rice. Investments in the market segments by improving the quality standards, branding, and ensuring consistent supply, are important avenues to make locally produced rice more competitive against imports. Sources: 1The Philippine Star, 23.01.2026; 2The Nation, 22.01.2026; 3Ecofin Agency, 19.12.2025; 4 EAC-Gazette- Vol.-AT-1-No.-18; 5Drewry, 22.01.2026; About the Authors: Alisher Mirzabaev is a Senior Scientist in Policy Analysis and Climate Change at the International Rice Research Institute (IRRI). His research spans rice agri-food systems, rice markets, economics of land degradation and climate change with over 100 scientific publications. Bethelhem Legesse Debela is an Economist and Policy Expert at the International Rice Research Institute (IRRI) based in Kenya. Her research focus includes agri-food systems transformations, food economics, policy analysis, labor economics, impact assessments, gender, poverty, diets and nutrition. Valerien Pede is a Senior Agricultural Economist at IRRI and currently serves as Head of the Transformative Policies & Investments (TPI) Unit. His research covers spatial econometrics and regional analysis, impact evaluation of agricultural technologies, foresight and policy analysis, commodity price dynamics, and the intersections of climate change, food security, and poverty. https://www.philstar.com/business/2026/01/23/2502819/all-rice-imports-due-next-month-da https://www.nationthailand.com/blogs/business/trade/40061559 https://www.ecofinagency.com/news-agriculture/1912-51566-senegal-to-cap-rice-price-at-cfa300-in-2026-despite-rising-global-prices https://www.kra.go.ke/images/publications/EAC-Gazette-Vol.-AT-1-No.-18----of---30th-June-2024-050724.pdf https://www.kra.go.ke/images/publications/EAC-Gazette-Vol.-AT-1-No.-18----of---30th-June-2024-050724.pdf https://www.drewry.co.uk/supply-chain-advisors/supply-chain-expertise/world-container-index-assessed-by-drewry