DAVAO CITY - The
National Food Authority (NFA) in the Philippines has
hiked its rice supply to Davao City by 40-50% from just
30% last month to stabilize the price of commercial rice
sold in the market.
Felimon Cangrejo, NFA-Davao
City assistant manager, said they decided to saturate
the market with NFA rice to refurbish the supply because
of the high price of well-milled rice.
Because
of the high price, consumers have decided to purchase
NFA rice "because it is cheaper and has good quality",
he said.
"There was never a shortage of rice
supply, but there was a lack of supply of cheaper-priced
rice."
Presently, the buying price has actually
increased to P12.00 for dry rice from the previous
P10.50 (US 19 cents). This has resulted in a price hike
for rice sold in the market.
He said that
ordinary rice is being sold commercially at an average
of P20.00 per kilo while well-milled rice is sold at an
average of P22.50 per kilo. The seven-tonner grade can
fetch as much as P26.00 per kilo.
Meanwhile, NFA
rice is sold at P16.00 for the regular-milled variety
and P18.50 for the well-milled variety.
The NFA
anticipated an increase in the price of rice as the
months from July to September are considered lean months
in terms of harvest. But with 200,000 bags of rice
imported from Thailand and Vietnam arriving last week,
they expect the price of rice to
stabilize.
"Starting in August we can start to
see a decline in the price," Cangrejo said.
He
said the rice shortage started with the implementation
of the Institutionalized Farmers As Distributors (IFAD)
last July. The program taps farmers as distributors,
especially during lean months, to give them a chance to
maximize their profits. Instead of the traders dictating
the buying price of rice, the program now reverses the
trend.
"The farmers can now sell their produce
to the highest bidder and right now the traders are
offering the best price," Cangrejo said, adding that the
price set by the farmers is not regulated by the NFA.
But the Grains and Retailers Confederation
(GRECON) has claimed that the program spells more
trouble than it is worth.
Salvio Arguillas,
regional treasurer of GRECON, said the supply chain has
become complicated, which provides more opportunity to
mark up the price.
"The farmers and traders have
a mark up of P110 [US$1.96] to the usual P850 per sack
of rice. We now buy rice from them at P965 per sack and
sell it at P1,000," he said.
He said from the
previous supply chain of NFA to retailers to consumers,
now, with the implementation of IFAD, it has become NFA
to farmers to traders to retailers before reaching the
consumers.
Silvestre Bonto of the National
Convenors of Irrigators Association (NCIA), said that
IFAD is a very laudable project for the farmers since
this is the first time that they can dictate the price
and therefore maximize their profits.
"It's just
the retailers who are complaining," he said.
(Asia Pulse/PNA)
Jul 24, 2004
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