The tight supply of rice in the market has pushed prices of rice and palay to new record highs during the second week of August.
Based on the Philippine Statistics Authority’s (PSA) latest price monitoring report, the farmgate price of palay has reached a new high of P22.28 a kilogram from P19.73 a kilo in the same period last year—up 13.5 percent.
Consequently, retail prices of regular-milled and well-milled rice have also peaked at P42.65 and P46.06 a kilo, respectively.
Compared to August last year, these are higher by 12.27 and 9.17 percent.
Supply tightened as the country has entered the lean rice production months, which stretch from July to September.
In a statement, the Philippine Rice Research Institute (PhilRice) noted that “without a comfortable level of stocks, there is a tendency for the price of rice to spike.”
According to the Department of Agriculture, the country’s current rice inventory can feed the whole country for 45 days—or half of the usual inventory during the lean months of 90 days.
The tight supply, while sufficient, adds to the pressure to push up prices.
Aggravating the price situation are higher production costs incurred by rice producers due to rising global oil prices and the implementation of the new tax law, which slapped an additional excise tax on fuel.
PSA also reported that the country’s production for the third quarter might not be as high as last year, citing the delay in planting due to the government’s late release of irrigation water and lack of rainfall.
In a press conference last week, Agriculture Secretary Emmanuel Piñol said rice prices might start declining by the fourth quarter when the next harvest season begins.
Data from PhilRice show that about 40 percent of the country’s palay is produced during the period, compared to just 16 percent in the third quarter.