Palay prices continued to go down, even dipping to as low as P11 per kilogram (/kg) as farmers approach the tail-end of the harvest season with a series of strong typhoons.
Latest data from the Philippine Statistics Authority (PSA) showed that the average farm-gate price of palay continued its downward movement, falling by 4.1 percent to P15.79/kg from the price level of P16.47/kg in the previous week.
Year-on-year, the price increased by 0.2 percent from its average price of P15.76/kg in the same week of the previous year.
Unfortunately, prices went down to as low as P11/kg in areas like Surigao del Sur and Cavite, which means some farmers were forced to sell their produce at a loss.
In other areas like Agusan del Sur and Bulacan, farmers barely made money, with palay sold at exactly or just slightly above P12/kg.
In the Philippines, the average production cost of rice farmers stood around P12.72/kg, which is higher or nearly double than what rice farmers in Vietnam and Thailand spend to produce the staple.
This means that if prices fell below that amount, farmers would receive earnings that are lower than what they spent for.
Some said that with the current production cost, the breakeven farmgate price of fresh harvest should be around P14.50/kg.
Meanwhile, highest palay prices were recorded in areas like Bataan, Nueva Ecija, Zambales, Pampanga, Rizal, and Palawan wherein the commodity were sold at P18/kg to P21/kg, the same PSA data showed.
Federation of Free Farmers (FFF) National Manager Raul Montemayor said that in the next few weeks, as farmers approach the tail-end of the harvest season, palay prices will definitely go down further.
This, as palay, when damaged by storms, could yield to poor quality rice, which, among other reasons like the continuous entry of imported rice, could result in traders deciding not to buy at all.
“Rainy weather is also to blame since traders have to discount for grain deterioration due to lack of drying facilities,” he said.
A data from the Department of Agriculture (DA) showed that as of October 29, Typhoon Quinta already destroyed 79,239 metric tons (MT) of palay worth P1.13 billion within 62,880 hectares of farms.
Then there’s the threat of Typhoon Rolly, which is expected to make landfall in Quezon and Aurora provinces on Saturday (October 31) and become a super typhoon.
Montemayor also thinks that the continuous decline in palay prices is already “not surprising” since government intervention is doing very little for farmers.
According to him, the National Food Authority’s (NFA) palay procurement has had minimal impact despite pronouncements of DA, while the planned suspension of sanitary and phytosanitary import clearances (SPS-ICs) on rice “came in too late, as in last year, to influence farmgate prices.”
“Too little too late [actions] again by the DA,” Montemayor said.
“At this time, [DA can do] very little. Damage was already done and most farmers have already harvested. Some typhoon-affected farmers (like those in Occidental Mindoro and Isabela) are asking NFA to buy storm-damaged palay but I doubt if they will do that since the agency itself doesn’t have dryers,” he added.
Montemayor was particularly referring to Agriculture Secretary William Dar’s previous order for NFA to intensify its palay procurement in order to address decline in palay prices.
To recall, NFA, whose sole mandate now is to secure the government’s buffer stock, buys palay at P19/kg and is given P7 billion every year to do this.
Also, more than a week ago, Senator Cynthia Villar, chairperson of the senate agriculture committee, asked the DA to stop issuing SPS-ICs to rice importers during harvest time, which would probably take effect after the next planting season.
Business Bulletin sought the reaction of DA Spokesperson Noel Reyes regarding the decline in palay prices, but he is yet to respond.