The National Food Authority’s (NFA) palay-procurement program achieved only 4 percent of its target volume for 2018 as of end-June, as traders continued to aggressively compete with the food agency for locally produced rice.
The NFA purchased only 76,120 50-kilogram (kg) bags of palay, or around 3,806 metric tons, as of June 29. Data obtained by the BusinessMirror showed that the volume is 4 percent of the agency’s procurement target of 2 million bags, or 100,000 MT, this year.
Also, the volume is 9.47 percent of the NFA’s goal of purchasing 804,000 bags, or 40,200 MT, in the January-to-June period.
For the month of June alone, the NFA’s procurement did not even reach half of its target volume of 30,100 bags (1,505 MT). The agency managed to purchase only 4,418 bags, or 220.9 MT, of palay last month.
Industry and government sources told the BusinessMirror that the low palay-buying price of NFA is the culprit behind the lackluster performance of its rice procurement program.
The NFA’s support price of P17 per kg is lower than the offer of traders who buy palay at P20 per kg to P25 per kg. The food agency has cited this as reason for asking the NFA Council (NFAC), the agency’s highest policy-making body, to raise its support price for palay to P25 per kg.
However, the NFAC has been adamant about maintaining the current support price, as increasing it could accelerate inflation.
The average farm-gate price of palay continued to go up for the seventh consecutive week, as it hit a new 45-month high of P21.36 per kg despite the arrival of rice imported by the NFA.
Preliminary data released by the Philippine Statistics Authority (PSA) published recently showed that the farm-gate price of unmilled rice as of the third week of June expanded by 10.79 percent, from its average quotation of P19.28 per kg
a year ago.
PSA data compiled by the BusinessMirror showed that this is the highest recorded average farm-gate price of palay since the fourth week of August 2014, when the average quotation reached P21.33 per kg.
The latest farm-gate price of palay is just a few centavos away from surpassing the highest quotation of P21.53 per kg recorded by the PSA starting the fourth week of July until the first week of August in 2014.
From June 13 to 19, the PSA noted that the average price of palay was well above the NFA’s buying price of P17 per kg.
The highest farm-gate price of palay was recorded in South Cotabato, where traders bought rice at P25 per kg.
The lowest quotation of P18 per kg was recorded in Surigao del Norte.
Image credits: Nonie Reyes