Palay prices drop, but farmers not worried

UMINGAN, Pangasinan—The buying price of palay has dropped from P24 per kilo to between P20 and P21 this month, but rice farmers are not worried.

Ponciano Onia, a farmer from this town in Pangasinan province, says the break-even cost for palay production is P12 per kilo, so farmers will still net at least P8 if they sell their harvest to traders. But their profit will be only P5 if they sell to the National Food Authority (NFA) as the agency buys at P17.

However, traders who bought palay in September and October are complaining. One of them, Roger Tan, a rice mill owner in Rosales town, said he acquired his stock at P23.50 per kilo in September and P22.50 in October.

“With the buying price at P20.50 or P21 a kilo now, we are at the losing end. Rice millers did not expect that the harvest would be so much that prices are dropping. Perhaps we could just stock the palay and wait for better prices,” Tan says.

The dealer price of a 50-kilo bag of rice used to be between P2,000 and P2,050, but it is now down to P1,650 and P1,700. Retail prices are marked up by P2 so a bag costs from P1,750 to P1,800, Tan says.

Commercial rice, which used to cost P42 a kilo, is now sold at P36.

Onia and Tan note a slowdown in the market of commercial rice, citing complaints from traders and retailers. Ramon Cuaresma, manager of the NFA in eastern Pangasinan, attributes this to the agency’s decision not to limit the amount of rice that could be bought at retail stores.

“We opened the sale of NFA rice because of the low prices of commercial rice. If we don’t, we may not be able to sell anymore. But NFA rice is comparable, in terms of quality, with commercial rice,” he says.

The sale of commercial rice has been slow because farmers still have stock as the harvest season is just ending, Cuaresma says.

Ninety-five percent of the 124,000 hectares of rice lands in eastern Pangasinan had already been harvested while the remaining farms would be harvested by the end of December, he adds.

“We are lucky this year that no serious calamity hit the province, that is why we have a bumper harvest,” Cuaresma says.

The NFA in eastern Pangasinan has 50,000 bags of rice in its warehouse and is waiting for a shipment of 80,000 bags from the NFA Ilocos regional office. Yolanda Sotelo, Inquirer Northern Luzon