Bloomberg reports that total rice loss in the northern Philippines from super typhoon Megi could amount to 600,000 metric tons. There was 157,000 hectares of rice crop in Megi’s path and the Philippine government is now assessing the extent of the damage and crop loss.
The Philippines is currently the worlds biggest importer of rice but was attempting to stop being reliant on imports and had a plan to become self sufficient in three years. The government will most likely have to import greater volumes of rice to meet the demand this year after Megi.
Sadly, crop insurance is not yet widely available in the Philippines, in fact insurance penetration is said to be roughly 15% across all lines of business. Microinsurance is beginning to become available but unfortunately for the farmers affected by this storm it may not have been marketed to them yet. Storms like Megi really demonstrate the need for microinsurance for farmers in storm prone regions of the world.
Global rice prices are likely to be affected as if the Philippines import demands rise it will put pressure on the market which is already struggling due to weather in other regions of the world and will probably push prices up. This means the end result for the people affected in the northern Philippines is that they will pay more to eat this year, microinsurance products would at least help to dampen the impact of food price rises after disasters.