Gov’t says rice enough but prices say otherwise

The lack of government-subsidized rice in markets created a gaping hole that is lending falsity to the equation that supply and demand dictate prices and leading to an anomalous situation in which prices continued to increase despite officials’ assurances of sufficient supply.

Rice prices nationwide had increased by as much as P5 per kilogram after the National Food Authority (NFA), whose principal role was to keep prices stable by selling or buying rice, admitted its rice stock was dwindling and good for only two days.

Government officials blamed the price hikes on profiteering by traders but vendors pointed an accusing finger at the NFA.

In markets from Luzon to Visayas, lack of NFA rice was cited as the main reason for high prices, although critics of the Duterte administration from the left attributed it to the effect of a tax reform package now being enforced by the government.

Deliveries

The lack of low-priced rice prompted the NFA to start delivering from its buffer stock. In Bohol, as many as 30,000 bags had arrived from the NFA depot in Cebu City.

Maria Fe Evasco, NFA Bohol manager, said the shipment was delayed by port congestion and lack of vessel.

Evasco said the 30,000 sacks, however, would not be enough since it was the province’s last allocation and requests for more NFA rice would have to wait until imported stocks come in.

She said the volume of rice delivered to Bohol was not even enough should the Department of Social Welfare and Development require rice for relief operations.

The NFA Bohol office stopped supplying low-priced rice to retailers on Jan. 22 because of shrinking supply.

Evasco said her office would resume distributing NFA rice to retailers on Feb. 12 in limited volumes.

The NFA in Central Visayas said there was no reason for prices to spike because there was enough rice in the market.

Justification

Olma Bayno, information officer of the regional NFA office, said traders were using the lack of NFA rice to justify price increases.

NFA rice costs P27 to P32 per kg while commercial rice sells from P40 to P54 per kg.

But Raymund Tafalla, assistant regional manager of NFA Eastern Visayas, said only about 2 percent of households consumed NFA rice.

“There is more than enough commercial rice available in the market,” Tafalla said.

So why are prices increasing?

Retailers said they had little choice but to hike prices because the cost of commercial rice went up just as NFA rice disappeared in the market.

P2 per kg price hike

Evangeline Herrera, 58, a rice retailer in Tacloban City, said she had to increase prices by P5 per kg because her acquisition cost also went up.

“We cannot do anything because we bought our supplies at a higher price,” Herrera said.

Adelyn Ruiz, a rice vendor in Cebu City, said she increased prices of commercial rice by P2 per kg.

She complained of being unable to buy NFA rice since December.

The situation of consumers could best be illustrated by the experience of Cresencia Castaño, a resident of Tagbilaran City, Bohol province.

For years, she had been buying NFA rice to save money.

But last week, the 60-year-old was forced to buy rice directly from farmers, which costs P12 more per kg.

In Eastern Visayas, the amount of NFA rice was down to 64,000 bags as of Tuesday.

NFA officials appealed to retailers not to hike prices but the plea fell on deaf ears.

In Iloilo City, a 50-kg bag of well-milled rice sold for P1,850, up from P1,750, according to a rice supplier.

In markets and stores, a kilogram of rice costs P42 to P43. “We can’t do anything,” said Herrera, a rice retailer at Tacloban City Public Market where a 50-kg bag of commercial rice now costs P2,050 from P1,950.

Adelyn Ruiz, rice vendor at Carbon Public Market in Cebu City, said she had to increase rice prices by P2 per kg. The most expensive rice costs P52 per kg while the cheapest costs P40 per kg.

Dwindling stock

As of Jan. 31, only about 140,000 bags of NFA rice were available in Central Visayas.

In northern Luzon, the NFA’s inventory was down to 70,908 bags of rice for the provinces of Ilocos Norte, Ilocos Sur, La Union and Pangasinan, according to an NFA official.

Sulpicio Terrado Jr., NFA regional economist, doesn’t see the stock being depleted, however. He said most consumers now bought commercial rice and farmers were keeping their own stock.

Private warehouses were keeping 204,000 bags of rice while 860,000 bags were in household stocks in the Ilocos region, said Terrado.

Pangasinan, Nueva Ecija and Isabela are top rice producers in Luzon.

The NFA La Union office in San Fernando City maintains two warehouses serving the Ilocos region and the Cordillera provinces of Abra and Benguet, which Terrado said release 1,400 bags daily.

But NFA western Pangasinan manager, Ramon Cuaresma, said the available rice stock was only 15,000 bags, which was barely enough to meet daily consumption of 13,160 bags in his area.

Reserved

NFA western Pangasinan can release only 10,000 bags as 5,000 bags had been reserved for calamities, local governments and jails.

The area’s warehouse caters to 320 retailers who are allotted five bags a week, and the inventory could last until the first week of March, Cuaresma said.

In Baguio City, the NFA inventory for the city and Benguet province was down to 14,428 bags, the lowest in seven years, according to Cecilia Concubierta, NFA manager in the area.

The stock was good for three days, although there was abundant supply of commercial rice in the market, she said.

In Ifugao province, commercial and government inventories total 135,373 bags of rice, which would be sufficient until harvest time, the NFA office there said. It said consumption in the province was at least 1,000 bags a month.

In Nueva Vizcaya province, the NFA stock of some 9,000 bags of rice was enough until April, according to Corazon Pangan, NFA provincial manager. She said it should “make the province relatively stable for now.”

7 bags a week

In Cabanatuan City, the NFA Nueva Ecija office had stopped supplying retailers since January, with 8,700 bags left in its warehouse, according to its manager, Genoveva Villar.

In December last year, NFA reduced weekly supply to retailers from 20 bags a week to seven bags a week due to dwindling stocks, she said.

Commercial rice inventory was enough for 240 days or until the next harvest season, she said.

But small retailers have been buying in bulk in anticipation of a shortage due to panic buying.

The absence of NFA rice in the market had destabilized prices, said Edna Aguilar, a rice retailer.

“Near the end of this month, expect the supply of commercial rice to reach critical levels. The selling prices of different grades of rice may increase some more,” she said.

Aguilar sells well-milled rice for P48 per kg, up from P46 per kg. She sells regular-milled rice for P40 per kg, up from P38.

In Isabela province, rice prices have also increased. Gloria Jimenez, a rice retailer in Tumauini town, said most rice varieties now cost P1 per kg more because of limited NFA supply.

Regular milled rice costs P32 per kg while other varieties sell for as low as P37 per kg to as high as P51 per kg.

The NFA warehouse in Cagayan Valley has 73,000 bags of rice—good for two days—but commercial traders have an inventory of 5.3 million bags, which was enough for 69 days. —Reports from Joey Gabieta, Ador Vincent Mayol, Nestor P. Burgos Jr., Leo Udtohan, Yolanda Sotelo, Anselmo Roque, Armand Galang, Ev Espiritu, Melvin Gascon and Villamor Visaya

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TAGS: NFA rice, Rice Supply, rie prices