Photo From Jhay Jalbuna/THEPHILBIZNEWS
In their effort to stabilize the price of commercial rice, the National Food Authority (NFA) sees price drop of commercial rice to P37 to P39 per kilo in two weeks from P40 to P42.
According to NFA Spokesperson Rex Estoperez, this forecast price drop would be achieved by flooding the market with NFA rice, which now accounts for 20 percent of the supply in the market, up from around 13 percent in August.
Estoperez explained that the current inventory in warehouses points to 2.3 million bags of NFA rice, which means the cheap rice could maintain its current 20 percent level of participation in the market for around 17 days.
Since the NFA Council has approved the importation of 750,000 metric tons (MT) of rice, the NFA spokesman said the imports are scheduled to arrive later this year, with the first batch expected to come before the end of November with an estimated of up to 6 million bags.
Estoperez also said that there is a possibility of increasing the market participation of NFA rice from the private sector as long as prices do not stabilize.
He said, “That’s the purpose of importation. The private sector needs to release their stock if ever they have any. And if prices stabilize, the NFA rice would step back and let market forces prevail. By then, cheap rice would revert back to being used as a buffer stock.”
The skyrocket prices of rice has worsened the nine-year high in inflation last August, official data showed. This was also aggravated by Typhoon “Ompong,” which left billions of pesos worth of infrastructure and agricultural damage in its wake.
The typhoon destroyed 517,175 hectares of rice farms which has production losses that is equivalent to 750,000 MT of rice, according to the Department of Agriculture.
While the decision to import rice could bring relief to the market, this will also put the agency deeper in debt. So far, the agency’s total debt to the national government at about P185.9 billion.
Meanwhile, Department of Agriculture Secretary Emmanuel Piñol told to THEPHILBIZNEWS that the PITC’s proposal to use private fund to import rice was not disapproved but was asked to be modified.
According to the Agriculture Chief, if the rice imported by PITC will just fall into the hands of the private investors and there is no assurance that it will be sold at P27 per kilo. Thus, it was agreed that PITC should consider funding the program using its own resources and allowing NFA to distribute the rice.
“That is the reason why PITC needs to secure the approval of NFAC. Because if there will be private investors or fund that will be used, who will then handle the distribution to make sure that the rice imported will be sold at P27 per kilo knowing that PITC is also asking for tariff exemption”, he explained in his text message to THEPHILBIZNEWS.
Lastly, as mandated by law and in reaction to Presidential mouthpiece Harry Roque that the PITC does not need the approval of NFAC, that would be a direct challenge to the mandate of NFA and NFAC. In closing, Secretary Piñol reiterated that he fully supports the efforts to stabilize rice supply and prices in the market.