The Department of Agriculture (DA) said strong buying activity from private traders has pushed palay prices higher, limiting the National Food Authority’s (NFA) ability to buy rice stocks from farmers.
The DA said private traders offered higher prices after the government imposed a four-month rice import ban and amid expectations of a strong El Niño later this year. Because of this, many farmers chose to sell to private buyers instead of the NFA.
From January to early May, the NFA bought only 13,127 metric tons of palay, or just 4.2 percent of its target for the period. NFA Administrator Larry Lacson said private traders outpaced government buying as farmgate prices rose sharply.
Despite lower procurement volumes, the DA said the situation benefited farmers by giving them better earnings. Officials also noted that the NFA was able to conserve funds, allowing it to buy more palay later as prices began to stabilize.
The NFA said it increased purchases from April to early May, buying more than 11,000 metric tons during the period as trader buying prices started to decline. The agency is now working to rebuild rice buffer stocks ahead of the lean season.
Agriculture Secretary Francisco Tiu Laurel Jr. said the NFA’s strategy was meant to maximize farmers’ income while ensuring enough rice reserves for emergencies and future supply needs.
As of May 7, the NFA’s rice inventory stood at 6.75 million bags, enough for about 8.7 days of national consumption.
The development highlights how market forces are currently favoring farmers through higher palay prices, but it also raises concerns about the NFA’s limited buffer stock buildup. The government is balancing support for farmers with the need to maintain enough rice reserves to stabilize supply and prices during emergencies or potential shortages linked to El Niño.
