Farmgate prices of palay continued a months-long slide to settle at P19.16 per kilo as of the second week of December, but the amount is still out of reach of government buyers.
According to the Philippine Statistics Authority (PSA), the average price of paddy rice has fallen by almost P3 per kilo since peaking at P21.87 in June for the nonfancy varieties.
The National Food Authority (NFA), which is mandated to ensure stable supplies and prices of the staple, buys at a basic rate of only P17 per kilo.
Fees such as those for delivery and drying are factored in, the NFA’s effective buying rate is P17.70 a kilo—still far below the prevailing farmgate price.
This has prompted farmers to sell their produce mostly to private traders, resulting in a dramatic drop of the NFA’s procurement volumes this year.
According to the latest Rice Market Monitor report of the Food and Agriculture Organization (FAO), the NFA managed to buy only 8,000 tons of palay in the first nine months of 2014.
Based on FAO data, the said volume was only 3 percent of the 286,000 tons of palay that the NFA bought from farmers in January-September 2013. In that year, the average price of palay was P16.93 a kilo.
According to the FAO, the Philippines is expected to again import 1.8 million tons of milled rice this year amid projections that growth in domestic production will be insignificant if not nil.
This would mean the Philippines— particularly the NFA—will have to depend again on large volumes of imports in order to meet consumer demand and maintain stockpiles, the FAO added.