First batch of rice imports due this month

MANILA, Philippines - The first batch of the 250,000 metric tons of rice the National Food Authority (NFA) bid out in November last year is arriving this month, agency head Jessup Navarro said yesterday.

The arrival of the imported rice will increase the NFA’s rice inventory which currently stands at 28 days.

Navarro, the administrator of the NFA, assured that the grains agency has sufficient inventory of rice and that it is “ready and has the capability to meet any increase in demand for NFA rice as commercial rice prices have slightly increased.”

Navarro clarified that commercial rice prices traditionally increase during off harvest seasons and traders peg their price based on their palay buying price.

The rule of thumb in rice trading, Navarro explained, is to double the price of palay when sold as rice. As such, if traders bought palay at P17 per kilogram, they would sell rice at P34 per kg.

Nonetheless, Navarro reiterated that the NFA is prepared to cushion the market against any increase in commercial rice prices because the agency’s rice inventory is at about 20 million bags, sufficient for some 28 days at a daily consumption rate of 726,000 bags.

“This inventory level is almost double the mandatory 15 days food security buffer stock,” Navarro said.

Navarro further assured that “the coming palagad or summer harvest that usually starts in February will further boost the food security stocks we have in our warehouses.”

Navarro added that the policy of the NFA is to maintain a high yearend inventory of rice and to position stocks strategically to give consumers ready access to rice supply and protect them from any unwarranted price increase.

Having sufficient supply on a per province basis also makes it easier for the NFA to increase the volume of its rice distribution whenever demand goes up or when infusion of rice from the private sector slows down.

Navarro said the availability of such inventory allowed the NFA to immediately increase by 35 percent to 40 percent the volume of rice distributed in Metro Manila in the aftermath of typhoon “Ondoy.”

“It is important for us to maintain sufficient rice supply nationwide,” said Navarro.

“The NFA will tap the more than 24,000 active market outlets in intensifying rice distribution,” he assured.

Navarro said the proactive rice importation made for 2010, coupled with the intensive palay procurement in 2009 despite the typhoons, puts the agency in a better stock position this year.