Palay farmgate prices fall 17% in Jan.

THE FARMGATE PRICE of unmilled rice (palay) fell 17% year on year in January to an average of P20.69 per kilogram, after rice imports hit record levels last year.

Month on month, the palay farmgate price fell 0.05% to an average of P20.70, the Philippine Statistics Authority (PSA) said in a report.

The PSA said all regions except the Eastern Visayas reported falling prices on average in the 12 months to January 2025.

Month on month, only seven of the 16 regions posted growth in average farmgate prices — Cagayan Valley, Calabarzon, Mimaropa, Bicol, Central Visayas, Eastern Visayas, Soccsksargen, and Caraga.

The highest palay prices in January were posted by the Eastern Visayas, where palay prices rose 28.4% year on year and 7.0% month on month to P24.79 per kilo.

The lowest farmgate price was recorded in Calabarzon at P17.41 per kilo from P23.55 per kilo, down 26.1% year on year.

The biggest decline was logged by Cagayan Valley at 26.8%, with its average farmgate price falling to P20.37 from P27.84 per kilo.

The Department of Agriculture (DA) has said that it can “purchase more from farmers as palay prices this year averaged P21 to P23 per kilo compared with P27 per kilo in 2024.

The DA lowered the price of National Food Authority (NFA) rice to P35 per kilo, days after declaring a food security emergency due to an “extraordinary” spike in the price of the grain, despite lower tariffs for imports.

“That is expected given the huge inflow of imports in 2024 coupled with the reduction in tariffs and the softening of international prices,” Raul Q. Montemayor, national manager of the Federation of Free Farmers Cooperatives, Inc., said via Viber.

“We hope that the DA will be as concerned about this as they are with rice retail prices.”

The DA last month said it was expecting the palay harvest to exceed 20 million MT this year.

In 2024, rice imports hit a record 4.68 million metric tons (MMT), against 3.6 MMT a year earlier.

Mr. Montemayor said palay production in 2024 declined by 972,427 MT, equivalent to 612,628 MT of rice.

“But the country imported about 1.2 million MT more than what it bought abroad in 2023.

So, the decline in local production was more than offset by imports by around 600,000 tons.”

The national rice inventory rose to 2.16 MMT in January, up 6.4% year-on-year.

Month on month, the rice inventory declined 15.7% from 2.56 MMT in December.

President Ferdinand R. Marcos, Jr. last year issued an executive order lowering the tariff on imported rice to 15% from 35%.

“One of our arguments in rejecting the order is its direct impact of reduced palay prices as traders and millers will have to contend with rice imports flooding the market,”  Samahang Industriya ng Agrikultura  executive director Jayson H. Cainglet said via Viber.

“We hope that under the food security emergency declaration, the DA through the NFA can procure more than the 15-day mandate to about 30 days buffer stock at the guaranteed price of P23 per kilo,” he said.

“A 30-day buffer stock would also be equivalent to 7-8% of rice consumption, and enhanced ability on the government’s part to intervene in the market to reduce rice prices,” he added.

The DA said Tuesday that economic managers owill soon review the tariff order to “assess whether it needs to be adjusted.”

It said Secretary Francisco Tiu Laurel, Jr. is “only inclined to recommend a revision of the current tariff level if retail prices of imported rice ease to the P42-P45 per kilo range.” — Kyle Aristophere T. Atienza