THE ‘unpredictable’ pattern of rice imports has depressed farmgate prices of palay, or unmilled rice, according to an organization of farmers.
In a statement, Federation of Free Farmers (FFF) National Manager Raul Q. Montemayor said rice traders are offering low prices for palay out of fear that imports will flood the market in the coming months.
According to the FFF, rice imports for the first eight months of the year fell 25% year on year to 1.66 million metric tons (MT), with the national rice inventory as of Aug. 1 also posting a 16% decline year on year.
“The decline in farmgate prices is surprising considering the lower imports. Palay buying prices usually go up in September because of the scarce supply of palay and then go down only during the peak harvest season in October and November,” the FFF said.
Based on the group’s field reports, the buying price of palay in September has declined to as little as P16 per kilogram on a dry basis, and from P11 to P13 per kilogram for wet palay.
FFF also said that palay prices averaged P18.39 per kilogram in late August, citing data from the Philippine Statistics Authority.
“Last year, traders bought palay from farmers during the first half of the year at relatively high prices and were caught flat footed by the massive inflow of imports in the second half of the year. Many of them could not unload their stocks at a profit and some had to suspend their operations,” Mr. Montemayor said.
Mr. Montemayor said that despite three million tons of excess imports in 2019, the Bureau of Plant Industry still issued sanitary and phytosanitary import clearances for 3.75 million tons of rice imports between January and September this year.
“However, less than half of the allowed volume has entered the country so far, mainly due to the increase in international prices of rice in response to the coronavirus disease 2019 (COVID-19) pandemic and weather disturbances in the region,” Mr. Montemayor said.
Mr. Montemayor added the Department of Agriculture (DA) has repeatedly assured that the country has ample rice supply, but did not say that the surplus rice inventory is due to imports.
“The problem now is that we already have a surplus at present, the main harvest is coming in, and the importers might still bring in more stocks in the coming months. The anticipated surplus is what is driving palay prices down,” Mr. Montemayor said.
The DA was asked to comment but had not replied at deadline time. — Revin Mikhael D. Ochave