NFA palay purchases slump despite improved pricing
Crowded out by private traders’ aggressive buying, the unmilled rice or palay purchases of the National Food Authority (NFA) slumped by nearly 95 percent in recent months despite the higher prices offered by the government grains agency.
The NFA purchased 13,127 metric tons (MT), or 262,540 bags, of palay from January and the first week of May, reflecting a 94.9-percent decline from 257,163 MT of palay procured from January to May last year.
The figure represents only 4.2 percent of the NFA’s procurement target of 313,315 MT for the period.
In a statement on Monday, NFA Administrator Larry Lacson said private traders “largely outpaced” the grains agency in recent months.
“The NFA has been adjusting to a very dynamic market—stepping back when private traders offered higher prices to ensure farmers benefited, then stepping up its buying as prices normalized,” said Agriculture Secretary Francisco Tiu Laurel Jr., also the chair of the NFA Council.
Despite falling short of its target, Lacson said local farmers gained from farm-gate prices that soared to more than three times the previous low of P8 per kilogram (kg), which was recorded before President Marcos had imposed a four-month ban on rice imports.
Lacson said expectations of a strong El Niño later this year have pushed up palay prices.
Palay farm-gate prices increased by 14.2 percent to P23.18 per kg as of April, according to the Philippine Statistics Authority.
“The higher price environment has also helped preserve NFA funds, allowing it greater flexibility to buy more palay as the harvest winds down and ahead of the main procurement season later this year,” Lacson said.
Lacson said the NFA has “aggressively stepped up palay buying” since April as traders’ buying prices started to decline.
The grains agency bought 11,301 MT of palay from April to the first week of May to rebuild its buffer stocks as the harvest season tapers off.
The NFA also said it is maximizing purchases to support farmers while strengthening national rice reserves, noting that around 15 percent of expected production during this dry season remains to be harvested.
It is prioritizing palay farmers registered under the Registry System for Basic Sector in Agriculture in palay procurement efforts.
“Moving forward, it must continue to strategically build buffer stocks, prioritize direct support to small farmers and stay ready to stabilize supply and prices, especially as we approach the lean months and the next main harvest cycle,” Tiu Laurel said.
Under the Rice Tariffication Law, the NFA is mandated to maintain an optimal rice inventory level, sourced solely from local farmers, for distribution during emergencies or calamities and sustaining the government’s disaster relief program.
The NFA’s rice inventory reached 337,618 MT or 6.75 million bags as of May 7, enough to cover 8.74 days of national consumption.
