Rice price hikes in less than a week
Last week's hikes in rice prices could be among the biggest, if not the biggest.
Last Monday, March 31, I checked the world spot price, Thai rice 25% broken, it was $604/ton (was around $165/ton 4 years ago). When I checked the price again last Friday, April 4, it was $740/ton! An increase of 22.5 percent in just 4 days!
Locally, our farm caretaker texted me last Tuesday, April 1, saying that the price of rice in the barrio, a rice farming village, was already P1,500/bag of 50 kilos; the price of complete fertilizer was also P1,500/bag of 50 kilos. Last Saturday, the price of local rice was already P1,750, or 16.7 percent increase in just 4 days!
I wondered if the local rice farmers and traders were also following international rice prices in the papers before they will adjust their rice prices?
When government agriculture bureaucrats and some politicians blame big rice traders of "hoarding" the commodity, they are wrong. My observation is that "hoarding" and speculation for higher price in the coming weeks and months is done by almost everybody engaged in the sector, small farmers included. Upon noticing the rapid price hike of their palay (unmilled rice), some farmers who were not desperate for immediate cash kept their palay and rice in their house storage or in private or their coop warehouses (around P5/bag of palay flat rate; could be higher in other places).
When traders cannot get enough rice because the farmers were keeping the commodity, the former also panic and bid for even higher price to entice some farmers to withraw their stock from the warehouses and sell the commodity to the traders. And we go back to the old supply-demand dynamics of the commodity.
The only factor that seem to remain constant is government taxation of rice -- import duties for imported rice, registration permit fees (by the NFA) for rice millers, wholesalers and retailers.
Last Monday, March 31, I checked the world spot price, Thai rice 25% broken, it was $604/ton (was around $165/ton 4 years ago). When I checked the price again last Friday, April 4, it was $740/ton! An increase of 22.5 percent in just 4 days!
Locally, our farm caretaker texted me last Tuesday, April 1, saying that the price of rice in the barrio, a rice farming village, was already P1,500/bag of 50 kilos; the price of complete fertilizer was also P1,500/bag of 50 kilos. Last Saturday, the price of local rice was already P1,750, or 16.7 percent increase in just 4 days!
I wondered if the local rice farmers and traders were also following international rice prices in the papers before they will adjust their rice prices?
When government agriculture bureaucrats and some politicians blame big rice traders of "hoarding" the commodity, they are wrong. My observation is that "hoarding" and speculation for higher price in the coming weeks and months is done by almost everybody engaged in the sector, small farmers included. Upon noticing the rapid price hike of their palay (unmilled rice), some farmers who were not desperate for immediate cash kept their palay and rice in their house storage or in private or their coop warehouses (around P5/bag of palay flat rate; could be higher in other places).
When traders cannot get enough rice because the farmers were keeping the commodity, the former also panic and bid for even higher price to entice some farmers to withraw their stock from the warehouses and sell the commodity to the traders. And we go back to the old supply-demand dynamics of the commodity.
The only factor that seem to remain constant is government taxation of rice -- import duties for imported rice, registration permit fees (by the NFA) for rice millers, wholesalers and retailers.
posted by Bienvenido Oplas Jr | 2:12 AM
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