Rice Numbers

Hike in prices of government rice on hold
Christine A. Gaylican
Inquirer News Service

THE National Food Authority (NFA) has postponed a plan to raise the price of its rice by P1 per kilogram of milled rice, which is supposed to reduce the NFA net loss this year, Agriculture Secretary Domingo Panganiban said Monday.

The postponement was made on an instruction President Gloria Macapagal-Arroyo gave at a meeting with Cabinet officials last Sunday to help consumers cope with the rising cost of living amid soaring fuel prices, Panganiban said.

NFA regular rice will still stay at P16 per kilogram and well-milled rice at P19.50 per kilogram, he said.

With its price increase postponed, the NFA is expected to register a net loss of P8 billion this year. It is one of the government corporations that have been ordered to trim losses this year.

"The President decided to maintain prices for the sake of the consumers, but the NFA will definitely be incurring more losses this year," NFA Administrator Gregorio Tan Jr. told the Inquirer.

The NFA council led by the Department of Agriculture earlier proposed an increase in NFA retail prices by P1 per kilogram for both well-milled and ordinary rice to cut the NFA net loss by at least P1.5 billion a year.

The NFA is importing 1.8 million metric tons of rice this year, compared with 990,000 metric tons in 2004.

It has so far spent P28 billion this year, a 100-percent increase from P14 billion in the same period last year, because of the increased volume, price and freight costs of imported rice.

The price in the international rice market ranges from $320 to $350 per metric ton, held steady by the decision of leading exporters like China to stockpile additional supplies for their growing demand.

Tan said the NFA decided to keep a 90- to 120-day rice inventory buffer by increasing imports while domestic production remained weak.

Typhoons have cut the country's agricultural output, highlighting the need to import rice as early as January to prevent shortages because of a delayed summer harvest. With INQ7.net