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Philippines Economy News

Palay prices firm in third week of November

palay prices firm in third week of november - Palay prices firm in third week of November

THE average farmgate price of palay, or unmilled rice, rose 0.5% week-on-week in the third week of November to P15.52 per kilogram (kg), reversing an unbroken months-long streak of declines since rice imports were liberalized.

The Philippine Statistics Authority (PSA) said in its weekly palay and corn price update that the average wholesale price of well-milled rice fell 0.2% to P37.33 per kg week-on-week. Retail prices also fell 0.2% to P41.53.

The average wholesale price of regular-milled rice decreased 0.2% to P33.22 per kg, week-on-week, while retail prices dropped 0.1% to P36.70.

Rice prices at the consumer level are a major component of inflation because food is heavily weighted in the inflation baskets of developing countries. The government passed the Rice Tariffication Law, or Republic Act No. 11203, in March as an inflation-control measure, easing restrictions on the entry of Southeast Asian grain while charging shipments from those markets a 35% tariff.

At the farmgate level, where the key commodity is palay, the form in which farmers sell their crop, prices have been collapsing because private traders must weigh the cost of carrying domestic rice in inventory against cheaper foreign grain. According to reports, traders in some provinces have been offering single-digit prices to buy palay, well below the National Food Authority’s (NFA) support price of P19 per kilo.

Year-on-year, the farmgate price of palay is down 22.6%.

The NFA steps into the market as the buyer of last resort to maintain its minimum buffer stock, but it cannot purchase the entire harvest because of budgetary and storage constraints, leaving farmers to contend with private traders.

To compensate, the government has been trying to organize direct-purchasing programs via local government units to offer farmers a “fair” price. Legislators have also set into motion measures to increase the budget for farmer aid, including emergency loans and conditional cash transfers.

Rice farmers are pushing for the repeal of the law, claiming lost income for 2019 of as much as P140 billion.

The Agriculture department’s Field Programs Operational Planning Division Director Christopher V. Morales said the average increase in palay prices may not be true for all regions, with some also likely to be seeing declines.

Dapat tingnan saan yung regions o provinces na tumaas. Di ko masasagot specifically yan kasi di naman true to all areas. Dapat i-analyze mo province by province (We need to look at the regions where the price increased. I cannot answer specifically because that is not true for all areas. An analysis should be performed province by province),” he said in a text message.

The farmgate price of yellow corn grain averaged P11.96 per kg, up 0.1% week-on-week. The average wholesale price increased 0.2% to P21.02. The retail price was stable at P25.66.

The average farmgate price of white corn grain fell 0.1% to P13.34 per kg, week-on-week. The average wholesale price increased 1% to P17.10, as did the average retail price, which rose 0.3% to P26.78. — Vincent Mariel P. Galang

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