Rice price hike not due to lack of supply – NFA

THE reported slight increase in rice prices was not due to the lack of supply but is actually price-related, the National Food Authority (NFA) said on Thursday.

“We have adequate volume of industry wide rice inventories at this time. The country’s rice stocks, at 1.944 million metric tons, would last for 61 days based on the average national daily requirement of 31,462 metric tons,” NFA said in a statement.

The rice varieties, whose prices increased by P1-P2/kilogram (kg), were of premium, special and aromatic rice, or those with 5 to 15 percent brokens, and not the regular and well-milled varieties the majority of consumers prefer, the NFA noted.

Another reason the NFA cited for the price increase is that the low-priced stocks that traders and retailers are holding are starting to be depleted.

“Traders are now milling and starting to sell their newly harvested stocks bought at higher ex-farm prices. This harvest season, for example, traders were buying palay from P18 to P24/ kg. Thus, when processed into rice, the higher wholesale and retail prices will be passed on to retailers and consumers,” NFA said.

Also, the main harvest that started in late September is almost over and [during] the lean months, or the period when there is very low or no harvest is looming (from December to February), it is normal that prices will slightly increase, the NFA said.

A review of the past three-year period showed that rice prices tended to register an increase at this period, although this year’s increase was observed to be even lower than during the same period in previous years.

In November 2014, the price of regular-milled and well-milled rice were at P40.74 and P43.63/kg.; in 2015 – P38 and P42/kg; in 2016 – P35.97 and P41.80. This month, the average retail prices for regular and well-milled varieties are at P37 and P40/kg.