Sometimes we come across situations that just don’t seem to pan out in our brains. Situations that seem very clear turn out to be murky. I am kicking such a situation around in my brain right now, and am not quite sure what to conclude.
Prices for almost all kinds of foods are way out of balance in the Philippines. Yes, I know that prices are increasing everywhere in the world, and I don’t doubt that. But, when I compare certain commodity prices between the Philippines and other countries in the region, something doesn’t seem right.
A couple of weeks ago, Feyma and I found a new fish dealer in Davao called RDEX. They are located in Gaisano South Citymall, near the grocery area. The company is owned by Rudy Rivera, from General Santos City. I know Rudy and have had business dealings with him in the past, so I was happy to see this new place open up. Rudy is really a big businessman in this region, and owns a Fishing company, so it is natural for him to go into the retailing of fish. Anyway, Feyma and I stopped in to see what they were selling there, and we bought a few items. One item that intrigued us was a bag of frozen fillets of fish. This fish is called Basa, and is imported from Vietnam. It was a white fleshed fish, similar to a cod, or the closest fish caught locally is Lapu-Lapu. We bought some, just to give it a try.
Feyma made a British style Fish n Chips with this fish, and it was great! We normally use Lapu-Lapu fish for Fish n Chips, and this time we tried the Basa to see how we like it. It was super! Now, here is what I don’t understand. This fish, which as I said is imported from Vietnam sells for P99/kilo for fillets. Lapu lapu, which is almost identical in flavor sells for P480 per kilo for the whole fish! That’s right, P480 including the bones, head and everything, which means that the filleted meat is around P900 per kilo. Hmm.. fish imported from Vietnam, P99 per kilo. Local fish P900/kilo. Something simply is not right. The Philippines is an archipelago surrounded by water, so it’s not like fish is hard to come by. Why the big difference in price?
This kind of pricing applies to other items too. I was recently reading an article that in India, due to the rice shortage, people are turning to potatoes to fill the gap, and take some pressure off of the demand for rice. Indians are like Filipinos, they eat a LOT of rice! The price in India for potatoes is about 30 US Cents per kilo (P12/kilo). Here in the Philippines, potatoes are P70/kilo. That’s almost 12 times the price of potatoes in India. I did some research and it seems that potatoes can grow in almost any climate in the world, almost any kind of soil (even without soil!). So, why are potatoes in the Philippines twelve times the price in India? Something is not right about that, it seems to me.
It has gotten to the point where there are, in my opinion, serious misalignments of food prices in the Philippines. Are there people taking advantage of a worldwide food shortage that is just coming into play? A lot of Filipinos say that there is no rice shortage, only a lot of traders who are hoarding the rice in order to push up the price. Is this sort of thing happening with other commodities? Personally, I do believe that there are shortages in the world’s food supply, not just hoarders, specifically because it is a world-wide problem, not just something local. However, something is at play that I don’t have a finger on yet, when I see these kind of food price imbalances.
What do you think?
UPDATE: A column in the Wall Street Journal is advising that it may be time for Americans to start stockpiling food!
Hey Bob,
Something there in RP just aint right!
My wife just showed me a bag of frozen Tilapia Fillets she bought at Sams Club 3Lb Bag appx 8 Fillets $9.99
So if my calculations are right, the price of RP local fish even when compared to the U.S. prices of fish shows you guys are getting screwed there in Paradise.
Oh tell your Son thanks for the Laugh.
My wife says he looks "Pissed Off" with the price of the fish as he is holding it up. 😆
Hi Neal in RI – Ha ha… He wasn't mad, he's just a serious guy! Yep, I have been doing some comparisons, and on almost all meats and fish now, the prices are lower in the States than here in the Philippines! Amazing, huh? 🙄
It might be that what is not right is technology. If you dig a hole fill it with nothing but very small fish, feed them and protect them you get a lot of cheap fish. Although very controversial, genetically modified food can create a greater harvest. The right modified diet fed to chickens makes for lager birds. I am just asking could this be at all in play here?
Hi Bob!
First off, just to let you and Feyma know that we (son and hubby) are finally here in the Phils. (Gensan to be specific). We're just waiting for a friend's schedule to be open so that we can get a "free" and nice ride to Davao. 🙂
Anyway, yes prices here are a bit expensive that what I was expecting. Everytime we go to KCC, I always bring a calculator. Even loaf breads are getting expensive.
Pls. say hi to Feyma. I'll send a private message also to your contact info.
My friend just returned to the UK and he is convinced that food costs there are LOWER than here in Davao City.
I have noticed a very big hike in shopping costs here yet the supermarkets are always busy!!
I was going to send you this weeks add from Albertsons so you could compare prices but between my new computer and new scanner I couldnt figure out how to send it. Big bags of rice have been bought out at costco this week as people who own chinese food stores probly bouth them out. The normal size bags both 25 and 50 lbs are all gone as well as the twentky pound bags of Jasmin rice from thiland. Smaller bags of rice at regular stores are still well stocked but the price has been going up;. Rice is not a normal large seller here. The best pop deal we have this week is on coke. If you buy 10 2 liter bottles they are 67 cents each.
It was announced today that Sam's Club stores in the U.S. are limiting purchases of rice to four bags each. It appears possible that Costco will follow that trend.
By the way, no rice shortage in the U.S. We grow twice as much as we need. We sell the other half abroad.
It's all rather interesting in a the-world-economy-is going to hell-in-a-handbasket sort of way.
Very interesting Bob, check the RP stock exchange for commodities and see what they go for.
As history has proven time and time again…, you can take some of a mans pay, some of his home, and some of his labor, but take away a mans way to feed his family and you will have sown the seeds of rebellion !
Bob… One of the drivers of the food prices has been the mandated switch to bio fuels in the US. Made from grain, including rice, the prices have skyrocketed on the commodities because the demand is much greater for grains now.So, the corn, wheat, etc. that would have gone in your mouth now goes in your tank instead. Add in the cost of fuel for transporting the grain and you have much higher pricing. As to the disparity of pricing in the RP compared to the States, I think much of it has to do with the media and perception of shortage more than any real shortage. People hoard more if they believe a shortage exists and will pay higher prices. So, when combined with the oil prices, the retailers try and get as much as they can while they can. It is a viscious cycle. As to the fish example, the only reason it should be that much cheaper for an import that I can think of is dumping… That really is the only thing that makes sense, since the vast majority of RP fish is sold locally, rather than exported, if I remember correctly.
good thing I dont eat fish Hahaha 😯
The four baga of rice at sams clubs where 20 lbs each. More than an american family would eat in five years. Most americans would think a big bag of rice is 5 lbs.
Hi ben ream – I personally don't think it is an issue of technology. There are lots of fish ponds, and saltwater fish cages where they can breed and raise inexpensive fish here. You could be right, but that is not my feeling on it. Thanks for stopping by and leaving your comment.
Hi Lea – Yeah, almost everybody who comes here on vacation always tells us that they are surprised at the higher and rising cost of living here. It is quite shocking! Hope to see you soon!
Hi John – It's quite an eye opener to be living in a third world country and to realize that food is much cheaper in the first world, isn't it? I know it surprises me.
Hi Don – I saw an article online that Costco is already rationing rice purchases in some parts of northern and central California. It's quite shocking!
Hi Tom – I know that the US is a huge rice grower and exporter. Still, if there is rationing of purchases, given the law of supply and demand, that would tend to point to a shortage being present. What do you think?
Hi brian – Your statement about rebellion is absolutely correct. It is already happening in Haiti due to food shortages there. It's a worldwide phenomena! By the way, I read in the news yesterday that Japan is virtually out of butter! It is very hard to buy it anywhere there right now.
Hi John Miele – Very true about the biofuel push causing a lot of the price surges. My understanding, though, is that rice has not been used for biofuel so far, and it won't be. I understand that the Austrialian drought has made a huge impact on rice production and shortages on the worldwide market.
Hi Don – 20 pounds is a LIFETIME supply of rice for me! 😆 I honestly think that is true!
1 pound bag of rice at Alberstons is close to $2.00 a bag…saw a 10 pound bag for $14.00…10 pounds of Potatoes close to $4.00..you can buy 2 mango's for $1.50…banana's are $0.79 a pound…box ceral will scare you into never buying. 1 very small coconut that probably make most Filipino people laugh { because so small } is close to $2.00…gas is close to $3.60 a gallon now..that is not the best kind…1 can of tomatoes..small can are close to $1.39 a can…and string beans..1 can average $1.10 plus….have not been to Cosco for some time..not sure it is even worth keeping the $50.00 a year membership any longer…they used to be pretty good place on a lot of things..but not so true any more as far as I am concerned…I have found your small Mom and Pops grocery stores over all have the better deals…so really makes you wonder what is going on here…because if a small grocery store that maybe has 30 people work there can sell most items most of the time for less that your big chain stores like Safe-Way and Alberstons and etc do then it tends to make me feel that the big places are racking in the chips..because they have a lot bigger buying power than your small store does.
What I find sad about some of what you shared Bob is this….a big share of the peoples in the Philipines do not make very much money and kinda very sad if the prices on a lot of things there are more than here in USA..because no one that I know of works for $65.00 to $100.00 a month here in the USA!.. and sure there are many Filipino people that make around that or it was like that not to long ago…any way very interesting Bob…always enjoy reading your page..
Bob
Here in the states we are getting hit with the rising price of commodities and having a greater effect on the prices is the price of fuel to get the goods to the market. In the Philippines I am guessing but you have the rising cost of commodities, the rising price of fuel, and the rising EVAT tax. Getting hit from 3 sides on all food stocks is hard to take for most people in the Philippines where most of there earnings go for food. Interesting side note is that I have heard there are still some farmers here in the Midwest states that are getting paid not to farm there land. As for a shortage it is more of an increased demand since I have seen a large number of acres diverted to raising corn since the corn price has been pushed up by the ethanol plants. Right now the people who raise pork are going out of business due to the cost of corn, fuel, and the falling dollar so expect the price of pork to double in 9 months to a year. You can check the charts here on the Chicago board of trade http://www.cbot.com/ .
Hi Dan – Thanks for stopping by and leaving so much information! A lot of the prices you quoted are similar to prices here. Some are more, some are less. A few years ago all the prices here would have been much lower than in the USA. But, times are changing, no doubt. You are very right about the wages here, compared to the food prices. A huge portion of the population here is now surviving on nothing but rice, or very limited amount of any additional dish. Meat? That is only a rare treat for many families.
Bob,
Basa is actually catfish. It is primarily grown in ponds under chicken and pig pens where the fish recycle all the waste from the other animals. I just hope the fish filleting process is cleaner than the growing conditions! Here in Australia we have had government investigations into mislabeling (intentionally) of fish species in order to profit. Now they simply invent names like "Basa" so that no-one knows its actually catfish raised on chicken-sh_t"!!! 😆
Hi AussieLee – Since writing the article, I have done a little more research on the Basa fish from Vietnam. It is actually a fish also known as "John Dory." Not from the catfish family.
Here is a link where you can learn more about Dory Fish!
Bob,
Still can't say I agree. Hit Google a moment ago with "Vietnam basa catfish" and found lots of sites including this quote from an US site: "Basa and tra are finding their niche in the United States, much to the chagrin of the domestic catfish industry. First things first: Most of the fish sold in the United States as basa, basa catfish or Vietnamese basa isn't really basa at all. It used to be, but not anymore. Real basa is Pangasius bocourti, one of 21 species belonging to the Pangasiidae family of catfish, which is found throughout most of Southeast Asia. Basa have been grown by Vietnamese and Cambodian fish farmers in cages along the Mekong River for decades".
And the following snippet from Australia: "Names such as Pacific Dory or Catfish are incorrect".
You ought to look at some of the chemical residue tests conducted by authorities in western countries on these imports!
There is intentional misrepresentation and disinformation when people are substituting fish species and stand to make 1000% profit!
Hope to catch up with you one day, Bob. Maybe we can enjoy a Basa fillet 'n beer without worrying too much about what it really is or what it was fed!
I read an article that stated that shipping from from thailand to the Philippines is cheaper then shipping something from Cebu to Manila, because transport companies are owned by small number of families with no incentive to compete. One nice thing here in the U.S. is to buy items that are on sale for the given week, something that I have never seen in the Philippines.
Both Sam's Club and Costco are not worried about a shortage, it seems, but rather the cost of the rice. Something I did not know is that the profit margins for those stores are not in the products. They are in the memberships. They don't want to charge more for the rice than they can absolutely get away with. Raising the cost of rice means less will be bought but also potentially fewer memberships.
Yes, it is all confusing.
Again, it is all rather interesting and worrisome.
Hi AussieLee – I just did some further reading, and it seems that you are correct. It sort of surprises me, because I've eaten a lot of catfish, and this doesn't taste like catfish. All I can say for certain is that it is delicious! Chicken droppings or not! 😆
Hi Neil – I would believe that to be true. Business people here have little competition, and little reason to price fairly. I believe that plays a big role in the kind of price imbalances that I have mentioned in the column. Thanks for sharing what you have there.
Hi Tom – Interesting. Confusing. You are right on there!
just got back from the store{open 24 hours} banana's were 48 cents a pound bok choy was 89llb. yoplait yogurt 6 oz. for 50 cents each. 2lbs cheaese made in oregon 4.75. cottage 16 oz. 1.58. Navel oranges for38 cents a pound. Grapefruit three for one dollar small size. salmon for 1.38 per pound. one half gallon cookie dough ice cream Umpqua brand 3.50. sweet potatos 89 cents a pound. pork chops 3.28 a lb top loin pork chops, fresh strawberries 1.69/lb.
also gas at costco today was 3.49 gallon for regular.
Hi Bob , being a chef , i know a lot about food-prices,
And here in the Netherlands it's the same.
We live near the border of Germany and Belgium.
There is a real 3 country point about 30 Km from our home.
When we go shopping in Germany , we buy Netherlands products there
who are cheaper than here,
and it,s the same in Belgium.
So once a month we drive to there , to buy grocery , alcohol and beer ,
shrimps and porc.
And full our tank with gasolien.
But here it's because the governement taxes are very high.
Example , 1 liter gasolien will cost euro 1,50 [ is $ 2,40 – Peso 100 ]
it includes Euro 1,10 [ $ 1,75 – Peso 73 ] TAX.
And for you Dollar people at the moment is very hard , i just read , that
the Euro cost $ 1.60 and it say, that 3 years ago it was only. $ 0,82 .
But still in our country prices get higher allso by the day.
Gr. Anton
Hi Don – thanks much for sharing. Our gas here is more expensive than yours. I would have to do some price checking on the groceries to be certain on those.
Hi Anton – Interesting… thanks for sharing that.
Hi, Bob. Concentrating on fish: Lapu-Lapu (grouper) always command a premium price in the Philippines as far as I can remember.
Long John Silver and Captain D uses catfish ( your Basa) as their main ingredient for their fish fry. Yes, they are imported from Vietnam and China. Most grocery stores here sell them as the cheapest fish on display. Tilapia, red snapper, rainbow trout, Chinook salmon, tuna, swordfish (from cheapest to most expensive in that order) are also available.
There used to be a song by Yoyoy Villame (I think) that details the hierarchy in the Fish Kingdom. Lapu-Lapu is way up there at the top. "Butete" is at the lowest.
Well, that's my fish story.
sure glad I will never have to worry about getting that mercury poisoning 😆 and paying a high price for it
I think I might have eaten a total of 20 pounds of rice in my life time.
guess its time we all start planting our own vegetables!
Keep thinking about this overnite Bob,…I find it interesting that several commodities have been skyrocketing in price ( butter shortage in Japan?? Come on !!)…and looks to be more in near future, during a time when the stock market is flat and so is real estate investing/returns. Seems our glabal players have found another way to continue to get those double digit returns !!
An investor friend of mine ( used to be on the floor) has been preaching to me to invest in commodities..as he states…the new bull market !
sonds kinda fishy to me Doc !! LOL
Hi Dr. Long – Thanks for the primer on fish! About all I know for sure is that the basa tastes every bit as good as Lapu2, and costs about 1/5 the price! It makes purchasing decisions easy!
Hi Mike K – I'll get the shovel and the watering pail. You get the seeds. OK? 😆
Hi Brian – Yep, honestly I read an article online from a major newspaper that there is a severe butter shortage in Japan! I'm with you – somebody is making big money on food!
My feelings are there are no food shortages,it is caused by speculators sitting behind their computers earning millions.The shortages are on paper.
A.M. Costa Rica http://www.amcostarica.com/041608.htm
about rice production in us
Hi john.j. – I believe that the shortages are real, but we are all entitled to our own opinion.
Hi Vincent Hipp – Thanks for that resource.
Hi Bob – Read an article the other day stating that 1/3 of all corn produced in U.S, is goiong to bio-fuel. That has got to be a LOT of corn, and must susequently have an impact on the availability and price in the traditional marketplace.
Hi Bob, It appears that we are all suffering in one way or another. It really is a world economy and the world is tightening its belts. One good thing about shopping here is that you can use coupons and buy generic brands-that saves a huge amount of money. I admit that I am concerned about my future plans to live there-not sure if i will live that well anymore on my investments. Time will tell and the pendulum always swings both ways. Ron
Bob, I just read your article for my first post I just read the comments. I would suggest that its just profit taking on behalf of the Philippine business groups there. I don't know the answer but are there price controls, anti-trust laws, anti-price fixing laws there in the Philippines? If there are then I don't know if there are not, I think you can find a part of the answer in that area of thinking. Ron
Hi anthony – Yep, the biofuel rush is really playing a big role in the worldwide food crisis! No doubt there.
Hi Ron LaFleur – I have a feeling that this belt tightening that we are all doing is going to stay in play for longer than many of us anticipate. Unfortunately! I hope that it doesn't affect your plans for living in the Philippines eventually.
Hi Bob,Recently some scientists have raised concerns regarding bio-fuels,and feel that the rush towards bio-fuels could be more damaging to the world than global warming.World govt's are now discussing a re-think regarding bio-fuels.They should think hard and fast as a starving population would soon throw them out of govt.The word "shortages" coupled with media exageration always causes panic buying,hoarding and profiteering.Sometimes it may be prudent for gov'ts to stay silent.However someone would probably leak the news.We appear to have no immediate answers.From memory potato's have always been expensive in Phils.Could it be that prices are inflated as they are mainly consumed by westerners,just a thought.You are correct,potato can grow virtually anywhere.Originally from Peru and purple flesh,years of hybrid breeding produced a more attractive white flesh.(Can you imagine purple fries 😆 ).Introduced into europe 300yrs ago.China is now the largest producer in the world followed by India.Amazing.As Napoleon once said of China "Beware when the sleeping giant awakes" how right he was.Looking into my crystal ball,am i right,Asia will become the new 1st world,the West the new 3rd world,frightening.Regards Chas.
Hi Bob,Just another phrase of wisdom.Winston Churchill once said"If you wish to see into the future,look into the past".
Hi Chas – Thanks for sharing your thoughts. I particularly enjoyed that line from Sir Winston Churchill. I think the man never said anything that was bad or wrong… such an intelligent man!
Hi Bob. Here's another Winston Churchill anecdote. This time about government:
Using the trough (urinal) at the men's room with his fellow parliamentary members then, one of the members shouted at Winston why is he too far from everybody in the line of members using the trough.
"I don't want to be close to you people. Anything big you see. you nationalise".
😈
Hi Dr. Long – Ha ha… good one! 😆
My wife told me rice was 32 p. a kilo at the store in talasay now
..
I just found this. For more information on the subject. Are we to prepare ourselves for worst case senario??
Fo rhttp://edition.cnn.com/SPECIALS/2008/news/food.crisis/
Just found this for more information on the subject. Are we to prepare ourselves for worst case senario??
http://edition.cnn.com/SPECIALS/2008/news/food.cr…
Hi phil c – These days, P32/kilo is not bad! Here in Davao it is mostly P35.
Hi Preben C – thanks for sharing that. I'll check it out.
Hi Bob,Just some recent info i found regarding global food crisis.The reason farmers find it more profitable to grow crops for ethanol is that they receive favourable Gov'ts subsidies to do so.Which means that Gov'ts hold the key to most of this problem.However Gov'ts are waking up to the monster they have created,and discussing reducing the subsidies and alternatives.It takes 500lb of corn to make enough ethanol to fill the gas tank of a family car, once only.The same ammount of corn can feed the average family for 1yr.Obviously this is not the way forward.Bio-fuel is far from a green fuel,i would say immoral fuel.BTW,just announced today,air fares will rise 20% this year due to increased fuel costs.Regards Chas.
Hi chas – It would seem that this food crisis and fuel crisis are just getting started, and will be with us for the long term, perhaps permanently! It's a sad thing!
Hi Bob,
Came across your website while trying to find info on Davao City in particular and brother, did I hit the motherlode here. Well done!
I have been seriously considering moving to Davao recently after talking to friends here in Canada and had been thinking about Thailand before.
With regard to the above blog, I would have to completely agree with you. The exchange rate is about 34 Thb. to $1 and the Php. is about 42 to $1. As that translates to roughly 30% higher value for the dollar in the Philippines, why then is food 30 to 40% more expensive in the Phils. than in Thailand? Theoretically, it should be the other way around shouldn't it?