The sight of yellowing rice fields along the stretches of the North Luzon Expressway and Tarlac-Pangasinan-La Union Expressway in the month of October is a clear signal that harvest time for most of our farmers has come. It is an unmistakeable indication that the wet season is about to end and with it, the beginning of a new planting season for the dry months.
Last month’s harvest is part of the telltale signs that the nation’s rice stocks has been boosted. The rice fields along the two major expressways in the north are found in major producing provinces of Central Luzon. The two toll roads cut across Bulacan, Pampanga, Tarlac and Pangasinan provinces. One can hope that the palay harvests will lead to lower rice prices and reduced inflation rate in October.
Rice production in Central Luzon, according to latest official data, increased 12.2 percent during the first quarter of the year, making it a consistent top producer of palay in the country. The region that includes the top producing province of Nueva Ecija, Bataan, Aurora and Zambales accounted for 18 percent of the nation’s overall output. Western Visayas and Cagayan Valley followed at 14 percent and 13.8 percent, respectively, according to the latest available data from the Philippine Statistics Authority.
The Department of Agriculture has already assured sufficient rice supply in early 2024 following the harvesting of palay, or unhusked rice, in the current wet season. Rice imports that arrived in the third quarter of 2023, not the rice price cap, will also help the country’s stock.
DA Assistant Secretary Arnel de Mesa said the country’s national rice stock inventory was at a comfortable level of 77 days of supply in October. Once the wet season harvest ends this month, the national stock inventory is expected to last for 94 days.
“With our inventory plus imports, going into the first quarter of next year, the supply of our rice throughout the country will be stable,” de Mesa told a weekly news forum in Quezon City.
The easing of rice supply and the resulting lower prices in the market are significant because the reduced inventory spiked the inflation rate in October and the months before. Food inflation, which includes rice supply as a key factor, has become a major contributor to the overall inflation rate.
The PSA released data on Oct. 13 showing that the average farmgate prices of palay (dry) in the Philippines in September 2023 jumped 16.6 percent to P19.90 per kilogram from P17.06 in the same month last year. The prices were also higher by 10.2 percent from P17.06 in August. The Ilocos region registered the highest price at P22.67 per kilo.
The same PSA data showed that a kilogram of regular milled rice retailed at P48.14 during the first five days of September 2023. “Compared with its average retail price of P45.57 per kilogram in the second phase of August 2023 (Aug. 15 to 17, 2023), it increased by 5.6 percent,” the PSA said.
It also noted a 16.8-percent rise in the average retail price per kilogram of regular milled rice from P41.23 per kilogram in the first phase of August 2023 (Aug. 1 to 5, 2023).
A farmers group, meanwhile, had predicted on Oct. 10 that rice prices would drop toward the latter part of the month as supply rose due to the harvest.
“The harvest has begun so the supply of rice will increase, but it will take a little time. The rice will be milled before reaching the market. Within the next two weeks, expect the price of rice to drop a bit,” Leonardo Montemayor, chairman of the Federation of Free Farmers Cooperative, told radio dzBB, speaking in Filipino.
A bank analyst agrees and confirms a likely reversal in the inflation trend last month. Rizal Commercial Banking Corp. chief economist Michael Ricafort sees the inflation rate easing in October from 6.1 percent in September despite the latest round of fuel price hikes.
Ricafort says the relatively better weather condition in October and late July to September could have helped stabilize prices of vegetables and other agricultural products.
“The harvest season from mid-September 2023 to October 2023 that increased local palay/rice supply could have also helped stabilize or even helped ease local palay and rice prices, which account for nearly 9 percent of the CPI basket,” says Ricafort.
The rice situation in October will play a big role in the overall October inflation rate and the decision of the Bangko Sentral ng Pilipinas to keep or adjust further its interest rates. The yellow rice fields of Central Luzon and in other regions in the Philippines may serve as the harbinger.
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