The average farm-gate price of dry unhusked rice fell to a six-year low in the fifth week of August, according to the latest data released by the Philippine Statistics Authority (PSA).
Data released by the PSA showed palay prices declined by 27.4 percent to P16.68 per kilogram, from P22.98 per kg recorded in the same period last year. Local planters do not usually harvest rice from July to September.
The latest gate figure is the lowest since the fifth week of May 2013, when dry palay farm-gate averaged P16.71 per kg.
“The market is oversupplied by imported inventory,” University of Asia and the Pacific (UA&P) Center for Food and Agribusiness (CFA) Executive Director Rolando T. Dy said.
PSA data showed that as of August 1, total rice stocks expanded by 40.3 percent to 2.133 million metric tons (MMT), higher than the previous year’s level of 1.52 million metric tons (MMT), or by 40.3 percent.
Of the total rice stocks, 37.1 percent were in the households, 41.2 percent were in commercial warehouses, and 21.6 percent in National Food Authority (NFA) depositories.
Government data on rice imports in the first half showed that shipments expanded by 118.73 percent to $621.57 million, from last year’s record of $284.18 million.
This made semi-milled or wholly milled rice as the country’s 13th top import for the first half of the year, compared to only 26th during the same period in 2018.
Downward trend
With the increase in imports and the upcoming harvest starting October, the farm-gate price of palay will continue to go down, according to the Federation of Free Farmers Inc. (FFF).
“We expect prices to go down further as the main harvest comes in. The procurement of the National Food Authority [NFA] will not be able to arrest this by itself, as it will be able to capture only 3 percent of the harvest at most,” FFF National Manager Raul Q. Montemayor told the BusinessMirror via SMS.
The Rice Watch and Action Network (R1) said rice planters in rain-fed areas will be hardest hit by the continuos decline in farm-gate prices.
“The sad thing about it [drop in palay prices] is that majority of farmers in rain-fed areas are harvesting their crop. Of course, they are the most vulnerable. We hope government is ready to address the loss of incomes especially of the most vulnerable,” R1 Executive Director Hazel Tanchuling told the BusinessMirror via SMS.
The drop in the average farm-gate price of unhusked rice, however, was also reflected in the wholesale and retail prices of regular milled rice, according to PSA data.
In the fifth week of August, the retail price of regular milled rice fell by an annualized rate of 18.88 percent to P34.59 per kg.
On Thursday, the Department of Agriculture (DA) announced that it will be “flooding” the market with the NFA cheap imported rice to cut down the prices of the staple.
Agriculture Secretary William D. Dar disclosed they will be selling 3.6 million bags of rice nationwide.
He said imported NFA rice will be sold at P25 per kg to retailers and P27 per kg to consumers.