THINGS are looking up for rice farmers, especially in Nueva Ecija where palay harvests are fetching record high prices. In Sanchez Mira town, Cagayan province, farming continues to rely on the carabao. RICHARD BALONGLONG/INQUIRER NORTHERN LUZON
CABANATUAN CITY, Philippines—Farmers in Nueva Ecija province have been enjoying record-high farm gate prices of rice, but rice millers and traders said this good fortune may later affect consumer prices.
“Our buying price is P24 to P25 a kilogram for dry palay and P20 to P21 for the fresh harvest,” said Edgardo Alfonso, president of San Jose City Rice Millers Association (SJCRMA).
“The price is unusually high for the unhusked grains. I have not seen anything like this before. It has something to do with the rice millers and traders elsewhere competing to buy as many volumes of palay as they can,” Alfonso said on Wednesday.
One of the biggest organizations of rice millers in Luzon, SJCRMA buys palay in Nueva Ecija, Isabela, Nueva Vizcaya, Aurora and Pangasinan provinces. The buying price they offer in other provinces, though, is slightly lower due to hauling cost, the millers said.
In Aurora, the buying price of palay went up to P28 per kilogram early this month. For the same period in 2013, the buying price offered for dried palay was P18 to P20, and P12 for freshly harvested grains during last year’s peak season.
Millers prefer dry palay because the ideal moisture content for milling is 14 percent. Fresh grains contain 22 to 27 percent moisture. “I don’t think there will be a big reduction in the buying price (of palay) even during the peak of the harvesting season which will start next month,” Alfonso said.
At P25 per kilogram, a 50-kg sack of palay has sold for P1,150 per bag, which is higher than the P850 purchase price of the National Food Authority (NFA).
“This is really good,” said a local farmer, who sold his palay at P25 per kilogram. “With my harvest of 150 cavans per hectare and total expenses for inputs, harvesting, threshing, hauling and drying cost, I netted about P70,000 which doubled my usual margin of profit,” he said.
Alfonso said the rise in farm gate price is “very, very good” for farmers but could be bad for consumers. “At the current buying price of palay, the cost of milled rice will be no less than P42 per kilogram. It will be higher during the lean months,” he said.
He said farmers and farmworkers could be tempted to sell all of their harvest and buy cheaper NFA rice just to make a profit. According to Alfonso, the “thin supply” of rice in the world market has compelled rice mill owners and traders to offer a high buying price for palay as the local market competes for grains.
He said local rice production areas have been reduced despite the fact that the demand for rice has increased because of the increasing number of rice consumers and the thinning supply of imported rice.