Minimum P5 rice price hike seen

NFA-rice

Manila, Philippines – With the depleting stocks of cheaper rice from the National Food Authority, consumers should brace for a minimum increase of P5 in the price of commercial rice as the NFA is yet to replenish its inventory following the government’s rejection of rice importation.

The Grains Retailers’ Confederation of the Philippines Inc. (GRECON), the biggest grains business organization in the country, warned that while rice prices in the
market had risen by P2 per kilo0 since last month, this could further increase up to P5 at the very least.

“There will really be an increase because buying price from farmers is also high. Plus there is no supply from the NFA which means that there is no balancing act,” GRECON national president Jaime Magbanua said in a briefing on Wednesday.

“We are just the retailers, we buy and sell and we just pass on what was given to us. Now, we can already feel the increase in price but as to the further increase, we don’t know yet when it will be felt,” he added.

About six to eight percent or the poorest sector of the population depends on NFA rice, which serves as the price stabilizer to avoid jacking up of prices of commercial rice and premium ones.

But with NFA’s low inventory, the agency decided to recalibrate its distribution because its primary focus is still to serve as buffer stock for calamities and in the island provinces of the Philippines.

This resulted in the lack of supply in major markets, prompting ordinary Filipinos to buy commercial rice which is priced higher at P45 per kilogram to a high of P60 compared to the P27 to P32 price of NFA rice.

“And the basic law of supply and demand will show that prices will really increase because of this scenario. That is why we are also appealing to have the requested volume of importation be approved,” Magbanua said.

Urgent

Since last year, NFA has been requesting for the importation of 250,000 metric tons of rice for it to be able to sustain its food security and stabilization mandate.

“Unfortunately, the approval to do so has not been given until now. And the public has spoken, they urgently need NFA rice in the market. Taking away our low priced NFA rice is the most painful decision we had to make in the midst of rising prices of other commodities,” NFA administrator Jason Aquino said during the same briefing.

Aquino said that NFA will resume its distribution to accredited retailers once stocks have been replenished, but as to when, the agency is unsure.

“We have exhausted all the avenues to replenish our stocks. We are not the approving authority so the only thing we can do is to just wait,” he added.

Aquino also clarified that NFA’s two-day remaining stocks is applicable if there is no more rice supply in the households and commercial markets. To date, households can last for 52 days while commercial for 34 days.

“NFA has 1.2 million bags available nationwide and at the rate of 34,000 bags daily distribution, the whole inventory of NFA will last for only 35 days,” Aquino said.

Should the NFA Council approve the importation, it will take 45 days before the supplies reach the country.

“Thirty five days from now, NFA stocks will be fully depleted. If this very moment the NFA Council approves the importation, we will still have 10 days vacuum where there will be no supply of NFA because it will take another 45 days for imported rice to arrive,” Aquino explained.

This will add on for every day that the NFA Council fails to approve the importation which means that there is a bigger chance that there will be more days without NFA rice in the market, thus further increase in the price of commercial markets.

“We have already submitted all our recommendations including all these factors. But at the end of the day, it is still for the Council’s approval,” Aquino said.

‘Drama’

But NFA Council chairman and Secretary to the Cabinet Leoncio Evasco Jr. is cautious about claims that the NFA is facing a rice shortage, saying such scenario may have been a “drama” hatched to pressure the government to import rice.

In a phone patch interview with reporters yesterday, Evasco said there is a need to look into recommendations to import the staple to avoid “unscrupulous purchases of rice.”

“I have to check and call for a meeting of the council to find out what is true or is this just a drama to pressure the council to purchase rice. This is very sensitive, it is about a purchase. We have a task to protect government from unscrupulous purchases of rice,” he added.

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