MANILA: The Philippines’ state grains procurement agency has launched its biggest local rice buying effort in five years as it looks to build up buffer stocks and support local farmers, although the country will still require substantial imports.
The National Food Authority (NFA), which acts to ensure food security, said it aims to buy 189,845 tons of paddy rice from local farmers from January to June this year, the biggest volume since 2010 when first-half purchases totaled 230,965 tones.
Renan Dalisay, NFA administrator, said he had instructed NFA field officials to go on a “massive” procurement, targeting the major rice-growing provinces Iloilo, Palawan, Sultan Kudarat, Antique and Isabela.
Prices in the provinces had dipped to 14 to 16 pesos per kilogram ahead of the harvest, falling below the NFA support price.
“These are areas where the harvest is expected to begin this month,” Dalisay told Reuters. “The NFA is ready to buy everything.”
The NFA buys paddy rice at 17 pesos ($0.38) per kg, excluding delivery and drying incentives of up to 0.70 peso per kg, and sells it at 23 pesos to 32 pesos per kg to retail and wholesale buyers, cheaper than private traders.
The Philippines is one of the world’s biggest rice buyers despite record-high local harvests in recent years, and imported around 1.7 million tons in 2014, the most in four years.
The country’s unmilled rice output may rise 2 percent to 8.55 million tons in the first half from the same period last year, based on the latest forecast of the Bureau of Agricultural Statistics.
To keep its buffer stock at the ideal level of at least 15 days of national requirements, the Southeast Asian nation was looking to import up to 500,000 tons of rice for deliveries starting in March, government and trade sources told Reuters last month.
The NFA began the year with a buffer stock of around 520,000 tones, sufficient for 15 days. It needs to double that figure by July when the lean local harvest season starts.
The authority is soon expected to announce its import plans for this year. Shipments could reach 1.6 million tones, based on a forecast by the United States Department of Agriculture, although a government source said last month purchases this year could be less than 1 million tones.