The government expects retail prices of rice to drop with the food security emergency in effect and the maximum suggested retail price (MSRP) of imported rice lowered to P55 per kilo, the National Food Authority (NFA) said yesterday.
Such emergency declaration allows the Department of Agriculture (DA) to order the NFA to release its rice buffer stocks to stabilize retail prices.
In a separate statement on Tuesday, the DA said it will reduce today (Feb. 5) the MSRP of imported rice to P55 per kg from the previous P58 per kg, with more price cuts to follow in succeeding weeks.
The NFA in a briefing in Quezon City said that rice supply which it will release to government agencies, government-owned and controlled corporations (GOCCs) as well as local government units (LGUs) will be priced at P33 per kilo and the suggested selling price to the public at P35 per kg.
NFA said that under the current plan, it will provide 150,000 metric tons (MT) of rice for six months.
“NFA will release to our LGUs, GOCCs and others who are interested to sell at P33 per kg. And then, these stocks are suggested to be sold to the public by LGUs at P35 per kg. So hopefully, this will have an effect in pulling down rice prices,” said Roy Untiveros, NFA acting department manager for operations coordination.
The NFA has sent at least 53 invitation letters to LGUs in Metro Manila and Cavite to come up with agreements for the sale of the subsidized rice stocks, Untiverosa said.
“And we are waiting for the reply of LGUs so we can ascertain who are interested to participate.
We will then have a determined monthly allocation for each area depending on the number of interested LGUs,” Untiveros further said.
In the same briefing, Genevieve Guevarra, DA Assistant Secretary for agribusiness, marketing and consumer affairs, said that actual availability for the sale of the P35 per kg of rice supplied by the NFA, is expected to happen “within the week or next week.”
However, NFA pointed out that the move will entail losses for the agency which could be equivalent to P12 to P15 per kg.
The NFA did not provide an official figure of possible losses it is expected to absorb as a result of the program, but an estimate of its provided information shows that it will lose at least P1.8 billion and a maximum of P2.25 billion if the entire 150,000 MT allocation is utilized.
Despite the NFA warning, DA Spokesman Arnel de Mesa, assured that the National Price Coordinating Council (NPCC) is mandated to review the food security emergency every four months.
De Mesa said the NPCC signified its willingness to conduct the review every month.
“Secretary [Francisco Tiu Laurel Jr.] also said that we will always be guided with what will be the effects of this move, especially in rice prices,” de Mesa added.
DA said the early lifting of the emergency declaration may be considered if average rice prices reach P45 per kg of well-milled variety and P41 per kg of regular milled rice.
Tiu Laurel said as early as now, they expect a further reduction of the MSRP in the coming weeks, possibly below P50 per kg by early March.
“After this reduction, we plan to lower it further to P52 a kg by mid-February and then at P49 per kg two weeks after. This should reflect the lower global prices of rice and the reduced tariff,” the DA chief added.
Amid these developments, farm groups shared differing views on the government’s recent moves.
The Federation of Free Farmers (FFF) said that traders and retailers may not bring prices down to as low as P35 per kg as they “cannot afford to lose money,” citing the NFA warning of its potential loss of P12 to P15 per kg.
“If traders decide to ignore NFA and Kadiwa prices because these are unrealistic, then the price intervention of DA will not have its desired effect of pulling down prices. Traders may just surrender market share to NFA and concentrate on their own customers who are willing to pay more for better quality rice,” said Raul Montemayor, FFF national manager.
Montemayor said that for FFF, the continuous decline in international prices and the incoming dry season harvests will have a bigger impact on market prices.
Jayson Cainglet, Samahang Industriya ng Agrikultura executive director, said the food emergency declaration is a welcome relief to reduce rice prices but emphasized the need to revert
rice tariffs to 35 percent from the current 15 percent.
“The emergency declaration is a direct admission from the government that tariff reduction and unlimited imports have not lowered rice prices. The authorities should now run after those that continue to rake profits (profiteering) with the unjustified high prices of rice and charge them under the Anti-Agricultural Economic Sabotage law,” Cainglet said.
Based on DA’s monitoring of public markets in the National Capital Region, local well-milled rice sold for P40 to P55 per kg on Saturday while regular milled rice went for P37 to P46 per kg.
Imported well-milled rice was selling for P40 to P52 per kilo while the price of imported regular milled rice ranged from P38 to P48 per kg.
The special variety of imported rice fetched P52 to P61 and premium rice, P51 to P58.
Special variety local rice was selling for P55 to P63 per kg while premium rice went for P50 to P57 per kg.