The National Food Authority (NFA) auctioned off nearly 90 percent or 32,500 metric tons (MT) of its aging rice stocks during the third tender, freeing up warehouse space for palay procurement.
NFA Administrator Larry Lacson said the grains agency sold rice at an average price of P28 per kilo, resulting in P936.5 million in revenues. This exceeded its target amount of P912.4 million from the entire lot, he added.
Currently, the agency said bid documents are being validated by the NFA before all sale contracts are finalized.
For Agriculture Secretary Francisco Tiu Laurel Jr., who also heads the NFA Council, the strong turnout of the third tender allowed the grains agency to clear space ahead of the harvest season.
“But more important than the revenue the auction raised is the space it cleared in warehouses that will allow NFA to buy more palay from our farmers at a fair price.”
The NFA offered a total 737,339 50-kilo bags or 36,866 MT of milled rice that had been in storage for between 3 and 18 months.
The grains agency set floor prices based on stock age, ranging from P25.16 per kilo for rice stored three to six months, down to P22.52 per kilo for stocks held for over 18 months.
Of the 83 lots offered, NFA said it secured tenders for 57 lots, equivalent to 604,364 bags or 88 percent of total volume. A total of 39 bidders purchased bid documents, though only 19 are expected to secure contracts.
The additional warehouse space will be used to store purchased palay from local farmers at a minimum of P17 per kilo for wet and a floor price of P21 per kilo for dry. The dry harvest season for rice is expected to reach its peak between April and May.
Furthermore, the average price of P28 per kilo also signaled “firm demand” despite the age of the rice stocks, according to the NFA.
Last December, the NFA auctioned off 315,000 bags of aging rice, with prices landing within the expected P22.52 to P25.16 per kilo range.
“With added liquidity and expanded storage capacity in the coming months, the NFA is positioning itself to step up market intervention as harvest season advances, aiming to support farmgate prices while keeping buffer stocks manageable.”
Biddings in regions
Earlier, Lacson said the grains agency has outlined adjustments to the terms of reference (TOR) that may apply to the next auction round in early April, pending approval from the NFA Council.
“The TOR is being adjusted, since it’s necessary based on our previous auctions… we’re considering lowering the [minimum]volume of offer and bringing the auction process down to the regional level,” he said.
“For a faster and more efficient [process], the auction should be brought to the regional level since the central [office] gets clogged.”
Under the current TOR, the minimum acceptable quantity or volume of offer should be 5,000 50-kilo bags per lot, with Lacson citing stakeholders’ suggestion to bring it to around 3,000 bags instead. However, he did not disclose the final volume for the threshold.
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