By Madelaine B. Miraflor
The Philippines currently has an inventory of almost 3 million metric tons (MT) of rice as of May, while rice imports for the entire year is also expected to rise at about the same level.
As of May, the country's total rice stocks inventory was estimated at 2.95 million MT, an increase of 12.2 percent from previous month's stocks level of 2.63 million MT and an improvement of 1.3 percent from the previous year's record of 2.92 million MT.
This was based on the latest rice and corn inventory of Philippine Statistics Authority (PSA), which also showed that there has been a surge of 15,952.4 percent in National Food Authority (NFA) depositories.
In the span of five months, NFA's palay procurement went up to a five-year high, with 4.7 million bags or 238,427 metric tons (MT) of unhusked rice purchased from January to May alone. During the same period last year, NFA was only able to buy 3,571 MT of palay.
Right now, about 42.9 percent of total rice stocks inventory were in the households, 38.1 percent were in commercial warehouses, and 18.9 percent were in NFA depositories.
If forecasts are accurate, the Philippines, the world's second largest rice importer, will have more than enough rice for this year, with both local production and rice imports seen growing at record levels.
The latest report of the United States Department of Agriculture's (USDA) Foreign Agricultural Service (FAS) showed that the Philippines is expected to increase its rice stocks amid larger crops.
It also expects the country to import as much as 3 million metric tons (MT) of rice, which is higher compared to its previous official forecast of 2.8 million MT and last year's actual imports of 1.9 million MT.
For this year, Agriculture Secretary Emmanuel Piñol said the country's rice production will end at a record level of 20 million MT, higher than the 19 million MT produced last year.
The abundance in supply — mainly supported by the Rice Tariffication Law (RA 11203) which liberalized the rice sector by allowing the free-flowing entry of imported supply to the Philippines — has been pulling down the price of rice to the detriment of the farmers.
During the fourth week of May, the farmgate price of palay went down by 0.2 percent week on week to P18.20 per kilogram. On an annual basis, it was lower by 13.7 percent from the previous year's level of P21.08 per kg.
At the wholesale trade, the average price of well milled rice also dropped by 0.1 percent week on week from P39.48/kg to P39.44/kg. It also went down by 4.5 percent year on year from a price level of P41.30/kg.
Average price of well milled rice at the retail trade also went down year on year from P44.03/kg to P43.10/kg. It, however, went up a bit by 0.1 percent from the previous week's level of P43.07/kg.
For the regular milled rice, the average price at wholesale also declined by 0.2 percent week on week from P35.79/kg to P35.73/kg. It fell by 5.8 percent from the price of P37.93/kg recorded in the same period last year. At retail, the average cost of regular milled rice increased a bit by 0.3 percent from P38.75/kg to P38.76/kg, but it decreased by 3.8 percent from previous year's level of P40.29/kg.
The reason why NFA was able to pump its supply to all-time high is because it now buys palay from farmers at price higher than what the traders are willing to pay the farmers.
The state-run grains agency currently buys palay at a fixed price of P20.40/kg and P20.70 per kg for individual farmers and farmer cooperatives/organizations, respectively. To recover potential losses, NFA will also start selling rice to other government agencies like Department of Social Welfare and Development (DSWD) and local government units (LGUs) at slightly higher rice starting September.
NFA Council, the highest policy making body of NFA, particularly set the price of rice to be sold to government agencies at P37/kg, instead of P27/kg, while the agency will continue to sell P27/kg rice to the public in selected areas.