Rice hoarding probed
The Department of Finance (DOF) is investigating if unscrupulous rice traders have been taking advantage of the liberalized import regime as the price gap between palay and retail rice prices has widened in some provinces.
“The DOF is closely monitoring potential distortions in the market, particularly the price gap between farm gate and retail prices. The gap between the per-kilo retail price of regular milled rice and farm gate price of dry palay is widest in the provinces of Iloilo (P29.75), Zamboanga del Norte (P28.50), Negros Occidental (P28.01), Kalinga (P25.33) and Bulacan (P25.25). The average gap is around P22 as the average retail price is P37.51 per kilo compared to dry palay farm gate average price of P15.71 per kilo,” the agency said in a statement.
For Finance Undersecretary Karl Kendrick T. Chua, the wide discrepancy between the farm gate price and the retail price of regular milled rice in some regions starting in October indicated a problem in the “middle supply chain.”
Chua, who heads the DOF’s strategy, economics and results group, said there could be traders who had “kept their imported rice stocks in warehouses to drive retail prices up despite abundant supply.”
Citing Philippine Statistics Authority data, Chua said palay prices were “still falling but the retail price is not falling as fast so there’s a growing disconnect.”
For his part, Finance Assistant Secretary Antonio Joselito G. Lambino II said they had received reports that “some traders reserve warehouse space without storing anything in them, so that they can put pressure on the farmers to sell at very low prices because the farmers now don’t have anywhere to put their harvest.”
The Bureaus of Customs (BOC) and of Internal Revenue (BIR) already established so-called “strike teams” that would be on the lookout for rice hoarding and smuggling.
“The antismuggling and antihoarding activities are expected to intensify as the Department of Agriculture and the Philippine Competition Commission jointly investigate possible collusion in the domestic rice market, alongside enforcement of tax and customs regulations by the DOF, BIR, and BOC,” according to the DOF.
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