Prepare for P2-a-kilo spike in rice prices, advises NFA

Published by rudy Date posted on April 13, 2011

THE prices of commercial rice might increase by P2 a kilo as a result of rising fuel prices, the National Food Authority warned Tuesday.

“When the present harvest is almost over by July, the price of local commercial rice may increase by as much as P2 per kilo despite projections of a good harvest,” administrator Angelito Banayo said.

“The continuing increase in the price of fuel will take its toll on farm products, especially rice.”

The oil companies on Tuesday raised diesel prices by P1.50 a liter, gasoline by P1.50, regular gas by P1.25, and kerosene by P1.40.

Diesel prices have risen by P8 a liter since the start of the year, and gasoline prices by more than P6.

“I think the buying public will understand that every time fuel prices increase, there is a domino effect,” Banayo said.

“Already, transport costs are up. Commodities are next.”

But Banayo assured the public that the price of government-subsidized rice will remain at P27 a kilo.

National Food raised the retail price of government-subsidized rice to P27 a kilo from P25 on Dec. 7 last year, and the wholesale price of rice to P25 a kilo from P23.50.

Meanwhile, Agriculture Secretary Proceso Alcala said the country would not need to increase rice imports beyond the 860,000 metric tons planned for this year.

Rough-rice production in the first half might beat the target of 7.6 million tons, while the full-year output might be more than the goal of 17.46 million tons, Alcala told reporters.

Philippine purchases from overseas can influence prices in Thailand, the world’s largest shipper, and in Chicago.

On Monday, Banayo said the country might need to import an extra 300,000 tons to ensure enough supplies in case of typhoons.

“We’re expecting a very good harvest,” Alcala said. The nation’s first-half production target is a 15-percent improvement from the same period a year earlier.

The Philippines, previously the world’s biggest rice importer, plans to more than halve purchases from about 2.5 million tons in 2010. –Othel V. Campos with Alena Mae Flores, Rey T. Salita and Bloomberg

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