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CITY OF
MALOLOS—As the palay-harvest season peaks, commercial
prices of the golden grains continue to soar, breaching
P17 a kilogram (kg) at the Intercity Industrial Estate,
widely known as a major rice-trading center in the
country, located in Bocaue town in Bulacan.
Arturo
Figueroa, National Food Authority (NFA) manager in
Bulacan, said rice prices normally start to slide down
at the start of the palay-harvest season and begin to
soar again once the harvest season has ended.
However,
despite the peaking of the harvest season in several
rice-producing provinces in Luzon that supply the grains
requirements of Intercity, rice traders explained to the
BusinessMirror that palay prices have soared from P17/kg
to P17.80/kg, depending on their quality and variety,
compared with the average price of P16/kg on the first
week of the month.
The
current palay price translates to a wholesale commercial
rice price range of P1,330 a sack, or P26.60/kg, to
P1,395 a sack, or P28/kg, the rice traders said. They
added that rice retailers usually add P2 to P4 mark-up
per kilo of rice.
Figueroa
cited several factors to explain why palay prices
continue to soar.
First,
most of the rain-fed areas devoted to palay production
were not planted with the country’s staple crop and most
were planted, instead, with alternative cash crops that
adversely affected palay production.
Lack of
irrigation water and higher capital inputs also helped
push palay prices up, Figueroa added.
Rice
traders in Intercity added that palay traders from
rice-producing provinces like Ilocos, Cagayan, Isabela,
Nueva Ecija, Pampanga and Tarlac are currently in stiff
competition with rice-mill owners in procuring the
produce from farmers.
As there
is an evident shortage in palay supply compared with
bigger demand, Figueroa said the law of
supply-and-demand prevails in the market to the
advantage of the farmers, but at consumers’ disadvantage
owing to higher prices.
To
protect consumers from the spiraling rice prices,
Figueroa said the agency is selling NFA rice to
accredited stores at P18.25/kg.
Allan
Paraiso, a palay classifier in Intercity, cited
speculations that palay prices might even breach the
P20/kg mark once the harvest season is over.
Paraiso
also cited reports that major palay traders in Nueva
Ecija and Isabela provinces still have warehouses that
are not fully stocked; they are still stockpiling, a
situation that will make it hard to pull palay prices
down.
NFA
sources said the decline in the country’s buffer stock
may be attributed to the clampdown in rice shipments to
the Philippines by rice-exporting countries.
With the
international rice price almost doubling, there are
speculations that NFA rice may soon be sold at a minimum
of P1,500 a sack, or P30/kg, in the near future, pushing
commercial rice price to around P2,000 per sack, or
P40/kg.
On the
local front, rice farmers were enjoying such good palay-buying
prices that majority of them opted to sell their stocks
to private traders who offered much higher buying price
compared with the government’s support price of
P12.50/kg.
Figueroa
earlier admitted to the BusinessMirror that the NFA’s
palay-procurement program is not competitive enough
compared with the commercial palay traders, who have
higher buying prices.
He added
that the NFA’s palay stock has only reached 4,783 sacks,
with 2,000 sacks directly procured by the agency and
2,783 sacks sold to the agency by farmers under the
government’s farmers option to buy back (FOBB) scheme.
Even
though commercial palay prices are not falling below the
government support price of P12.50/kg, Figueroa said
many Bulacan farmers have already opted to maximize the
NFA’s FOBB scheme.
Under
FOBB, farmers can sell their produce at harvest season
to the grains agency and after several months, when
commercial prices of palay have already increased, the
grains can be bought back by the farmers, with minimal
storage and handling fees, and sold to commercial palay
traders at a higher cost—this translates to bigger
profits for farmers. |
