The National Food Authority (NFA) has slashed the floor price of aging rice stocks by at least P2 (2 Philippine Pesos)per kilo in its bid to attract more bidders in its December auction. NFA Administrator Larry Lacson expressed the hope that the reduced floor price would entice more buyers for the agency’s aging rice stocks during its second tender on December 5. Notably, ageing of rice is a process of storing the grain for a period after harvest to improve its flavor and cooking properties.
In this context, Lacson also talked about the first grain auction in October were not many participants joined. Lacson told that the first auction was not that attractive, hence rice pricing was a bit slashed for the second auction. He further added that the food agency will conduct an auction every month to free up its warehouses of aging rice stocks. However, this move by government is also expected to ensure food security for all along with quality. NFA decision under the revised scheme is to sell 1.16 million 50-kilo bags or 57,920 metric tons (MT) of aging rice at grain auction with a total transaction value (TTV) of P1.44 billion. Broken down, the bulk of the volume consisted of stocks aged more than three months to six months at 578,340 50-kilo bags (28,917 MT). This was followed by rice stored for over six months to nine months at 457,340 50-kilo bags (22,867 MT).
Aging Rice (old rice vs new rice) Meaning
Under current rules, the grains agency’s rice stocks are considered “aging” starting from the third month after milling. The second grain auction is open to interested farmers’ organizations, cooperatives, or groups and private individuals or entities engaged in the grains business, including processing, wholesaling, and retailing.
“We’re hoping the auction in December will be more successful because of the current import ban, and there won’t be enough stocks,” Lacson said. “It’s also included in the country’s buffer stock, so we should release it to help tame rice prices.” Last month, the NFA said it is seeking about P3 billion in additional funds to rent private warehouses and buy more unmilled rice following the damage caused by typhoons. Lacson said NFA warehouses are already “almost full,” making it difficult to expand procurement without additional government support.
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