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Why Did NFA’s Rice Stocks Plunge 72% in Dec? Is That Causing the Staple Food Price to Go Up?

The National Food Authority is still waiting for approval to import 250,000 metric tons of the commodity
By Pauline Macaraeg |

 

 

When the Philippine Statistics Authority (PSA) reported last month that rice inventories of the National Food Authority (NFA) fell 72 percent to 156,600 metric tons in December 2017 from 564,200 MT the year before, consumers should have taken notice.

 

Total rice stock, which includes inventories held by commercial entities and households, also fell but by a more modest 14.7 percent to 2.8 million MT in December 2017 from 3.3 million MT the year before.

 

The NFA is the state company tasked to guarantee sufficient rice supplies in the country through its exclusive authority to import rice as well as buy palay or unmilled rice from local farmers at higher-than-market prices.

 

Now, the NFA has revealed that it has only 65,200 MT of rice remaining in its buffer stock, according to a report by GMA News Online on February 6. The “buffer stock” refers to the rice inventory the agency holds for lean months, typically happening from July to September.

 

Usually, the NFA imports rice to make up for thin inventories. The agency is required to have buffer stocks good for 15 days at any given time and 30 days during lean months.

 

However, NFA spokesperson Rebecca Olarte said that it is still awaiting the approval of the inter-agency council for the importation of 250,000 metric tons of rice. Olarte said the agency has been on standby for NFA Council’s approval since November 2017, GMA News Online reported.

 

The NFA earlier explained they have been prioritizing distribution to calamity-stricken areas such as Marawi and Albay, which have affected their supply.

 

Politicians have started to weigh in on the issue after noticing that the low NFA stocks have begun to trigger increases in prices of commercial rice.

 

Totoong may supply ng bigas sa mga palengke, pero nagkakaubusan na po ang tinitindang NFA rice. Dahil sa kakulangan ng tinitindang NFA rice sa merkado, napupuwersa ang ating mga kababayan na bumili ng mahal na bigas. (It’s true that there is rice in the markets, but the supply of NFA rice is fast dwindling. Because of the shortage in the NFA rice available in the markets, our countrymen are forced to buy expensive rice), ” Senator Nancy Binay said in a statement.

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Based on data from the PSA, prices of well-milled and regular milled rice have been on the rise since the start of the year. Well-milled rice cost Php42.51 per kilo while regular milled cost Php38.58 per kilo as of the fourth week of January—the highest prices recorded over the last two years.

 

Higher rice prices are a sensitive political issue in the Philippines as the staple food accounts for more than a fifth of the average Filipino household’s food expenses and almost nine percent of total consumer expenses.

 

 

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Pauline Macaraeg is Entrepreneur PH's data journalist. Follow her on Twitter @paulinemacaraeg

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