Not only will the move generate revenues, but also free up warehouse space for fresh palay procurement.
Last Friday, February 20, the National Food Authority (NFA) auctioned off 88 percent of its aging rice stocks, with the Department of Agriculture noting that the move generated higher-than-target revenues and freed up warehouse space.
The NFA offered then a total 737,339 50-kilo bags of milled rice that had been in storage for between three and 18 months.
Floor prices were also said to have been set based on stock age, ranging from PHP25.16 per kilo for rice stored three to six months, down to PHP22.52 per kilo for stocks held for over 18 months. NFA secured tenders for 57 lots out of the 83 offered, which is equivalent to 604,364 bags.
Thirty-nine bidders purchased bid documents, though only 19 are expected to secure contracts. At present, the NFA is validating bid documents before all sale contracts are finalized.
Agriculture Secretary Francisco Tiu Laurel Jr., who also heads the NFA Council, said, “[…]more important than the revenue the auction raised is the space it cleared in warehouses that will allow NFA to buy more palay from our farmers at a fair price.”
For his part, NFA Administrator Larry Lacson said he was happy with the outcome and told, “We are very pleased with the results, which allowed us to raise P936.5 million compared to the target amount of P912.4 million from the entire lot. We basically sold a total of 32.5 million kilos of rice at an average price of P28 a kilo.”
The agency noted that they intend to use the anticipated freed warehouse space to store palay it will procure from local farmers at a minimum of PHP17 per kilo for wet palay and a floor price of PHP21 per kilo for dry palay—especially with the dry harvest season for rice will reach its peak between April and May.
The strong average price of P28 per kilo also signals firm demand despite the age of the stocks.
Prior to this, last December, the NFA auctioned 315,000 bags of aging rice, with prices landing within the expected P22.52 to P25.16 per kilo range.
“With added liquidity and expanded storage capacity in the coming months, the NFA is positioning itself to step up market intervention as harvest season advances, aiming to support farmgate prices while keeping buffer stocks manageable,” added the DA in its statement.
