Palay buying price hits 2-year high

The uptrend in the average farm-gate price of palay is now on its ninth week and has breached the P21 a kilo (kg) mark for the first time in nearly two years, data from the Philippine Statistics Authority (PSA) showed.

As of the third week of May, the average farm-gate price of palay rose by 0.10 percent to P21 a kg from the previous week’s P20.97. This was 8.57 percent higher than the previous year’s quotation at P19.36 a kg.

Based on PSA data, this was the highest recorded average farm-gate price of palay since 2015, when the country’s palay production decreased due to the El Niño dry spell. The sector was able to hit a P20.91-a-kg price level during the third week of September that year.

For the first quarter of the year, the country’s palay production surpassed last year’s output by 4.6 percent to 4.62 million metric tons (MT) from 4.42 million MT.

The increase was mainly due to the sector’s expanded harvest area that has led to an increase in rice yield. For the period, the country was able to produce 3.87 MT per hectare (MT/ha) from 3.85 MT/ha in the same period last year.

Despite the steady rise in farm-gate prices, rice farmers said the gains were offset by higher production costs brought by the implementation of the first package of the government’s new tax reform, which led to higher fuel costs.

The farm-gate price is expected to stabilize this month as the harvest season ends and the lean months begin.

Likewise, prices for rice in the market have been increasing since the start of the year. As of the third week of May, average retail price for regular-milled and well-milled rice climbed to P40.23 and P43.93 a kg, respectively. Compared to year ago levels, prices have gone up by 5.22 percent and 7.08 percent, respectively.

In a statement issued last week, the National Food Authority said consumers could expect the government’s subsidized rice, priced at P27 a kg, to be back in the market starting this week.

NFA spokesperson Rebecca Olarte said the expected arrival of the rice imports would be on June 2 and the shipments were to be discharged in the ports of Surigao and Subic.