Philippines importing 250,000 MT rice to pull down rising prices

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MANILA will be importing an additional 250,000 metric tons (MT) of rice via open tender to beef up the National Food Authority’s (NFA) stockpile and arrest the spiking retail prices of the staple in the market.

The NFA on Wednesday said the NFA Council approved half of its 500,000 MT rice-importation request last September 4.

“In a meeting held at the NFA Boardroom on September 4, the Council has instructed the NFA to hold an open tender immediately for the importation of the additional rice stocks to arrive in November 2018,” the food agency said in a news release.

The NFA is set to hold its open tender within the month to be able to hit the November 2018 arrival time frame, sources privy to the development told the BusinessMirror. The sources, who spoke on condition of anonymity, said importers must bring in the volume within the whole month of November.

The sources said the NFAC’s marching order to the NFA is to ramp up its market participation to about 20 percent from its current rice inventory to ensure that people would not be falling in line for cheap staple.

“The additional importation can increase the NFA’s active participation in the market by as much as 20 percent,” the NFA said.

With the additional volume, the NFA’s total rice imports this year rose to 750,000 MT following its purchase of 250,000 MT via government-to-government scheme and another 250,000 MT via open tender in the first half.

Data obtained by the BusinessMirror showed that the country’s total rice inventory as of August 30 was pegged at 2.051 MMT, which would last for 64.57 days.

Of the total rice inventory, about 48 percent were held by households, while 46 percent were in commercial warehouses.

Rice inventory held by households reached 992,420 MT, which is equivalent to 31 days of national daily requirement. Rice stocks in commercial warehouses were pegged at 945,100, which is about a monthlong of the country’s daily national requirement.

On the other hand, the rice stockpile held by the NFA was only at 114,180 MT, which is equivalent to only 3.57 days of the country’s national daily requirement. The country’s national daily rice requirement is about 32,000 MT.

Record-high harvest

The approval of additional rice importation by the NFA comes amid the Department of Agriculture’s (DA) projection of another record-high palay harvest this year.

Based on the estimates of the DA, palay output this year would increase by 120,000 MT to 19.4 million MT on the back of expanded harvested area driven by high-buying price for the staple.

Agriculture Secretary Emmanuel F. Piñol told the BusinessMirror he is optimistic that 2018 palay production will surpass last year’s record harvest of 19.28 MMT.

Piñol said farmers hit by typhoons in Central Luzon, the country’s top rice producer, were able to replant and even expand their palay areas.

“We are positive that we will hit the target,” he said via SMS. “The rice farm areas have expanded because of the good buying price of palay.”

For example, Piñol said rice farmers in Western Visayas planted an additional 40,000 hectares in the first semester over the previous year’s hectarage.

“While rains caused by a series of tropical storms damaged a sizable area in Central Luzon and parts of Ilocos region, other parts of the country were able to expand the planted areas,” he said.

Based on DA data seen by the BusinessMirror, the country’s 2018 total palay output would translate to about 12.688 MMT at a 65.4-percent average milling recovery rate (MRR).  The volume is sufficient to supply the rice requirement of the country for 390 days, according to DA estimates. Given the projected full-year rice output this year, the country’s total supply would be at 16.604 MMT, or equivalent to 510 days of national requirement, according to DA data.

Image credits: Nonie Reyes

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