Palay prices seen to increase until October

MANILA, Philippines — Prices for palay might continue to rise until the peak harvest season in October, several classifiers and agents in Bulacan warned yesterday.

The agents and classifiers, who requested anonymity, noted that prices for the staple have increased by an average of P1 per kilo as of July 26 and might continue to go up until harvest time.

“This is because the stocks in the warehouses of traders are still low, considering that only a few farmers have began harvesting,” they told The STAR.

Given this scenario, they confided that palay traders may have taken advantage of the tight rice supply and increased their prices as the law of supply and demand dictates.

This increase, they added, would result in higher prices of rice as well.

Authorities conducted a surprise visit on two rice mills and a warehouse here last Aug. 24 to determine if there is really a shortage in the supply of rice.

But Raul Montemayor, Federation of Free Farmers national manager, said the problem “is not so much of hoarding” but more on the “low rice supply situation.”

“In fact it is risky to hoard now when harvests are about to start. These visits will only scare traders instead of getting their cooperation. Traders will withdraw from the market to avoid controversy, leading to even tighter supplies in the market,” Montemayor said, referring to the effects of conducting surprise visits.

He pointed out that there are still two to three weeks before a significant volume of fresh palay harvests could enter the market.

“And anything can happen during this period wherein rice prices may continue to rise if the rice stocks are not replenished on time,” Montemayor added.

A rice importer, who also requested anonymity, told The STAR in a separate interview that the majority of their sector has also decided to postpone making imports until such time that the government gives out a clearer direction.

The importer reasoned that they could not import and stock so much of the staple in their warehouses, even if it is in preparation for the possible effects of the El Niño phenomenon, because they might be accused by authorities of hoarding.

The importer noted that this early, other countries are already preparing for the effects of El Niño and have started their rice stocking preparations, especially with the decision of India to suspend its rice exportation activities and with Vietnam and Thailand raising their grain prices.