No plans to hike support price for palay, says Yap

MANILA, Philippines - The government is not likely to increase the support price for palay from the current P17 per kilo, according to Agriculture Secretary Arthur C. Yap.

In a talk with reporters, Yap said the National Food Authority (NFA) has assured that the country’s buffer rice stocks are good for at least 38 to 40 days.

“I talked to NFA administrator Jessup P. Navarro and he said he has close to 40 days worth of stocks, so there is no compulsion to import,” Yap said.

A rice industry insider admitted that the current rice market appears soft with adequate domestic and foreign supply.

However, the source expressed the view that government should take a conservative stand and “have more stocks than less.”

He expressed confidence that the country’s rice imports this year would be lower than the 2.3 million metric tons imported in 2008.

Yap earlier revealed that the NFA has a standby authority to import up to two million MT.

The NFA has already imported 1.5 million MT from Vietnam and a separate authority was given by the grains agency for the private sector to import an additional 200,000 MT.

Another standby authority, Yap said would allow the import of an additional 300,000 MT.

But according to the rice industry insider, the private sector is once again talking of importing an additional 120,000 to 150,000 MT, which could bump up total rice imports this year to almost 2.2 million MT.

The additional rice imports is targeted to arrive around July 15 during the traditional lean months, the source said.

Yap has shied away from announcing the country’s buying intent following global criticism last year that the Philippines’ rice purchases has been a major factor in driving up global rice prices.

The Philippines is now the largest importer of rice.

However, Yap did admit that since next year is an election year, “we want stability.”

“The President has issued orders time and again in the last few months for the Agriculture Department to make sure that there is adequate supply of rice,” he said.

The 2.3 million MT of rice that the Philippines imported last year supposedly drove benchmark world rice prices to a record  $1,080 per metric ton in April 2008 from a range of $350 to $400 a ton in December 2007.

This year, with the soft global market, rice prices are down to $350-$550 per metric ton.

Thus, talks of additional rice purchases from the Philippines could easily affect global rice prices anew.