Prices of commercial rice expected to drop soon to P37-P39 a kilo

The National Food Authority (NFA) said prices of commercial rice should drop to P37 to P39 a kilo in about a month, amid efforts to stabilize the prices of the staple.

NFA spokesperson Rex Estoperez told reporters in a chance interview that prices of commercial rice should soon drop from the current range of P40 to P42 a kilo.

This, he said, would be done by flooding the market with NFA rice, increasing the market participation of the poor man’s staple.

NFA rice now accounts for 20 percent of the market, an increase from around 13 percent in August, he said.

However, it will still take some time to tame soaring prices.

“What we are expecting two weeks to one month from now is that prices will slightly soften,” he said on Thursday.

He said the current inventory in warehouses pointed to 2.3 million bags of NFA rice, which means the cheap rice could maintain its current 20 percent level of participation for around 17 days.

The NFA Council has approved the importation of 750,000 metric tons (MT) of rice. He said the imports were scheduled to arrive sometime later this year, with the first batch expected to come before November ends.

The inventory has the potential to reach up to six million bags given upcoming imports, he said.

He also said there was a possibility of increasing the market participation of NFA rice from the private sector.

“That’s the purpose of importation, that’s why the private sector needs to release [stock] if ever they have any,” he said.

When prices stabilize, NFA steps back and let market forces prevail.

By then, cheap rice would revert to being used as buffer stock, according to the official.

The spike in rice prices contributed to the nine-year high in inflation in August, official data showed.

This was then later followed by Typhoon “Ompong,” which left billions of pesos worth of infrastructure and agricultural damage in its wake.

The typhoon left 517,175 hectares of rice farms destroyed, translating to production losses of about 750,000 MT of rice, according to the Department of Agriculture.