The average farm-gate price of dry palay rose to P16.26 per kilogram in mid-March and one farmers’ group said this upward trend is expected to continue following reports that Vietnam is stockpiling rice.
Latest preliminary report by the Philippine Statistics Authority (PSA) showed that the average farm-gate price of dry palay increased for the third straight week to P16.26 per kg.
This is now the the highest average price level for dry palay in the past six months since P16.28-per-kg quotation recorded in the first week of September 2019, historical PSA data showed.
Farmers groups and organizations said the farm-gate price of palay could still rise due to ”a confluence of events.”
Federation of Free Farmers (FFF) President Raul Q. Montemayor said the buying prices for palay during the dry harvest season are usually high in anticipation of the lean months.
This was fueled further by the difficulties in transporting rice due to the check points and lockdowns imposed by local government units due to the coronavirus disease 2019 (Covid-19) outbreak in the country, Montemayor said.
He said traders, particularly those that are able to get through checkpoints and transport goods, have been buying rice at a higher rate.
Citing reports from the ground, Montemayor said the buying price for palay in certain rice-producing areas, like Isabela, has gone up to P19 per kg.
The buying price for palay, Montemayor pointed out, could continue to increase in light of reports that Vietnam, the country’s top source of imported rice, will stockpile tons of rice and may halt exports.
”Nagkakaagawan na. Nakikita na ng traders na pamahal na iyong imports. Nakikita ko na lalo pang tataas [ang presyo ng palay] kapag nakita na ng traders na tumumal ang imports,” he said via phone call. [Traders are outbidding each other as they are seeing the increase in the price of imports. As I see it, farm-gate prices will rise further once traders observe a decline in imports.]
’Silver lining’
A coalition of farmers groups and nongovernment organizations (NGOs) said in a statement over the weekend that one of the good things that may arise from Vietnam’s proposed export ban is the increase in local palay farm-gate prices.
“If there is anything good that has come out of Covid-19, it is that palay prices is slowly picking up. It is possible that traders are also anticipating supply tightness,” said Maning Rosario of Pambansang Katipunan ng mga Samahan sa Kanayunan.
”We expect that with Vietnam’s temporary export [halt], local palay prices will continue to increase. This maybe good news since we have yet to recover from our income losses since RTL [rice trade liberalization law] was implemented last year,” Rosario added.
Nonetheless, the industry groups called on the government to strengthen the country’s food security and remember the lessons of the 2008 rice crisis.
“This is what the group has been fearing all along. We become very vulnerable as global shocks like today’s global pandemic and the 2008 rice crisis can raise international rice prices to the roof as supply becomes tight, and/or countries hold on to their food supply for their own needs. Food security will be at risk and this could further magnify the impacts of Covid-19,” said Rice Watch Action Network Executive Director Hazel Tanchuling.
Last week, the government’s Inter-agency Task-force on Re-emerging Infectious Diseases (IATF) has endorsed the P31-billion food security enhancement program of the Department of Agriculture (DA) to ensure sufficient domestic supply of food.
Furthermore, the IATF—the government’s highest policy-making body for Covid-19 containment efforts—also approved the DA’s proposal of importing 300,000 metric tons (MT) of rice in case there’s a need to augment supply.
The DA has assured the public that the country has enough rice for at least the next four months.
Citing latest figures from the Philippine Statistics Authority (PSA), Agriculture Secretary William D. Dar said the country’s rice inventory is expected to settle at around 2.661 million metric tons (MMT) by end of the month, which is enough for 75 days.
Dar added that nationwide rice stocks by end-June are projected to reach 2.3 MMT, equivalent to 67 days of consumption at a daily consumption rate of 35,369 MT.
In a radio interview few days ago, Dar said the country has imported about 500,000 MT of rice as of March 27.
Image credits: LAILA AUSTRIA