Outbid by rice traders, NFA loses market volume

Outbid by rice traders, NFA loses market volume

/ 02:05 AM February 13, 2024

MANILA, Philippines  —The National Food Authority (NFA) was able to sell only 18.34 percent of its targeted volume of rice in the fourth quarter of 2023 as higher farm-gate prices offered by traders weakened its stockpiling.

In its accomplishment report, the NFA said it had procured 858,604 bags, or 42,930.2 metric tons (MT) of palay or unhusked rice, in the fourth quarter, sliding by 63.19 percent from 2.3 million bags (116,641.25 MT) in the same period a year ago.

The buying volume was equivalent to just 8.34 percent of the food agency’s target volume of around 10.3 million bags (514,916.5 MT) for the three-month period.


In December alone, the NFA was able to buy only 43,643 bags of palay, down 86.7 percent from 327,302 bags in the same month last year.


READ: NFA hikes buying price for palay to help farmers earn more

“The low procurement can be attributed to the active participation of traders offering higher farm-gate price that is above the government support/buying price,” the NFA said in the report.

Limited distribution

It noted that the farm-gate price of palay in December had averaged P25.44 per kilogram for clean and dry stocks and P21.86 per kg for wet/fresh variety.

These prices were higher than the NFA’s buying price of P19 to P23 per kg for dry palay and P16 to P19 for wet palay as announced in September last year purportedly to improve farmers’ income and ensure ample supply of the staple food. Farmers expectedly chose to deal with traders who were willing to pay better prices.

The low turnout came despite an increase in the government support or buying price amid buffer stocking incentives and “aggressive procurement strategies” of the NFA.

READ: Over 600 Bulacan farmers get higher buying price for palay


During the reference period, the NFA distributed 408,344 bags of rice (20,417.2 MT), down by 66.44 percent from 1.2 million bags (60,834.7 MT) a year prior. This was less than a fifth of the NFA’s distribution target of 2,227,020 bags (111,351 MT).

“Sales of NFA rice [were] limited only to disaster/calamity response of LGUs (local government units) and other government relief agencies [that] did not require substantial volume considering the fair weather condition in the country,” it added.

NFA rice inventory

The NFA was also forced to unload old or aging stocks to monetize these stocks before their quality deteriorates. It had accumulated aging rice due to low distribution rates.

READ: NFA rice buffer stock falls short of safe level, report shows

The food agency is mandated by the Rice Tariffication Law to maintain the optimal level of rice inventory and dispose of it in case of emergencies and calamities. It can source palay only directly from palay producers.

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Specifically, the NFA is tasked to “manage efficiently and effectively the acquisition, quality maintenance and disposition of the buffer stock during emergencies and calamities.” INQ

TAGS: Business, National Food Authority, procurement, rice supply

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