Ahead of the expected start of rice harvest in March, data from the Philippine Statistics
Authority (PSA) showed that the farm-gate price of unmilled rice fell to its lowest level in 8 years in the first week of February.
PSA data indicated that the average farm-gate price of dry palay settled at P15.97 per kilogram. The figure was 19.1 percent lower than the P19.73 per kg in the same period last year.
On a weekly basis, however, PSA data showed that the figure was the same as price recorded in the last week of January.
Historical PSA data showed that the current average farm-gate prices of dry palay is the lowest since the P16.02 per kg recorded in the first week of July 2011.
Palay harvest will kick off in the first week of March and will run until the middle of May.
The decline in farm-gate prices, which started last year, was attributed by authorities and industry players to the surge in rice imports after Republic Act (RA) 11203, or the rice trade liberalization law, took effect on March 5, 2019.
To prevent farm-gate prices from declining steeply during harvest, the Department of Agriculture (DA) said recently that it will void all unused import clearances for some 1.8 million metric tons of rice issued last year.
Agriculture Secretary William D. Dar also said the Bureau of Plant Industry (BPI) will no longer issue sanitary and phytosanitary import clearances (SPS-ICs) to farmers’ organizations that serve as dummies of unscrupulous traders.
Dar made an assurance that invalidating SPS-ICs issued in 2019 will not cause a shortfall in rice supply, as the Philippines has stocks sufficient for at least three months. Apart from this, he said 175,000 metric tons (MT) of imported rice entered the country in January.
“We will void unused SPS-ICs because we have rice inventory good for 90 to 94 days. Plus harvest is coming,” he told reporters in an interview.
The agriculture chief said he has instructed BPI Executive Director George Culaste to find out why there are still unused SPS-ICs, some of which were issued a few months after the effectivity of the rice trade liberalization law.
He added the government may indicate an expiration date for the SPS-ICs to force traders to bring rice into the Philippines within a specified period of time.
Data from the BPI, an attached agency of the DA, showed that there were some 1,752 unused SPS-IC at the end of 2019. The BPI issued a total of 4,069 SPS-ICs from March 5 to December 31, 2019, for 3.63 MMT of imported rice.
The agriculture chief urged traders to desist from applying for SPS-ICs during harvest so as not to depress the farm-gate price of unhusked rice. He said the BPI may approve fewer SPS-ICs during harvest.
The enactment of RA 11203 deregulated the rice industry and eased import requirements. Under the law, traders must secure SPS-ICs from the BPI prior to purchasing imported rice.
The DA said it is banking on the P10-billion Rice Competitiveness Enhancement Fund and its hybrid rice program to increase palay output to 19.6 MMT, from last year’s 18.48 MMT.
Image credits: Laila D. Austria