Palay traders are currently on a “buy-and-sell” spree to evade the possible dip in prices over speculations that more imported rice are arriving in the country this year.
As a result, palay prices in most provinces have been on an uptrend, allowing farmers to earn more.
While the Department of Agriculture announced last year that the country would only need to import 1.6 million metric tons (MT) of rice to address the expected shortfall in the local supply of the staple, the proposal to cut the tariffs slapped on rice imports is sending jitters to traders and millers, who are scared of getting stuck with huge inventory of higher-priced palay and rice.
The proposal is to reduce the tariff rate on rice to 35 percent from the current in-quota and out-quota rates of 40 percent and 50 percent, respectively. The policy change is still being reviewed by the Tariff Commission.
“Traders are competing over palay that they could sell immediately before the arrival of imports affects prices in the markets. Most of them are finding it hard to speculate so they want to take advantage of the market now when prices are stable,” said Raul Montemayor, chair of the Federation of Free Farmers.
In the regions of Cagayan Valley and Central Luzon, palay prices have risen to a high of P21 a kilogram from a low of P15 a kilo last year. Average rates are currently between P17 and P20 a kilo across rice-producing provinces, according to sources.
Samahang Industriya ng Agrikultura chair Rosendo So said they were expecting palay prices to go down in the coming weeks when the harvest season starts. In addition, more imports are already beginning to arrive in the country’s ports. Between January and February, the Bureau of Plant Industry recorded a 27-percent increase in the volume of rice shipments to 446,858 MT.