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!