NFA palay purchases jumped by 312% in first 8 months of 2013

The National Food Authority said the volume of palay it bought from farmers surged by 312 percent in the first eight months of the year to 281,767 metric tons from 68,313 MT in the same period last year. Photo taken from agriculture-ph.com

MANILA, Philippines—The National Food Authority said the volume of palay it bought from farmers surged by 312 percent in the first eight months of the year to 281,767 metric tons from 68,313 MT in the same period last year.

At the same time, NFA administrator Orlan Calayag said in a statement that the country’s importation of milled rice had so far been brought down to 205,700 metric tons this year from a high of 2.3 million MT in 2008.

“Interestingly, during the periods when we were importing a substantial volume of rice, no question was ever raised on the procedure followed to effect importation,” Calayag said.

He was referring to allegations such as those made by activist lawyer Argee Guevarra, who said that rice imports from Vietnam was overpriced at $459.75 per MT.

“We can only surmise that the media campaign against our importation for this year may be the handiwork of those who have been affected by our efforts to cleanse the NFA,” Calayag said.

He said that NFA carefully guarded every step of the importation to make sure that this would not be used as a cover-up for unauthorized private importation.

Calayag said the NFA had formed a committee, where the governments of the Philippines and Vietnam were represented, to handle negotiations. An oversight committee was also formed to supervise the importation.

Calayag said Guevarra was mistaken about the price as the lawyer compared prices that included insurance, freight and other costs related to the handling of cargoes from port to warehouses to the landing price.

This means that, in shipping parlance, Guevarra was talking about “free on board,” or FOB, prices while questioning NFA’s acquisition price expressed in terms of CIF, DDU (FOW)—cargo, insurance, freight, delivered, duties unpaid, free on warehouse.

“The two (prices) are not comparable since the cost of safe delivery of the rice to predetermined NFA warehouses is included in the CIF, DDU price,” Calayag said. “This cost is in addition to the FOB price.

Also, Calayag explained, the FOB price did not cover losses brought about by spillage, shrinkage and shortlanding.  The latter means cargo volume that is less than what was originally shipped.

Calayag said the $459.75 that Guevarra mentioned was the price estimate for the rice from Vietnam to the port of destination.

“(But) as at the contract with Vetnam is at CIF, DDU terms, the estimation included transportation and other attendant costs in the delivery of rice to NFA warehouses for a total cost of $531.66,” Calayag said.