Jun Torres

Nueva Ecija rice millers stop buying palay as costs get steep

San Jose City – Rice mill pwners have stopped buying palay (rough rice), citing diminishing capital and the low demand of milled rice from outlets, particularly in Metro Manila.

“Our combined capital can only buy up to 60 percent of the usual volume of palay that we buy during harvest time,” Edgardo Alfonso, president of the San Jose City Ricemillers Association, said.

He said rice millers here used to buy up to 11 million metric tons of rough rice every year. The palay that they buy is miled and sold in Metro Manila and Southern Luzon.

“Our hands are tied and we cannot move on any further,” Alfonso Said.

This city has the most rice mills in Luzon. The owners, who mill rice year-round, usually send agents to various places in northern Nueva Ecija, Pangasinan and Nueva Viscaya to buy the farmers’ palay harvest.

Slow recovery

Not anymore.

“Our P2-billion combined capital was enough then as the palay buying price was from P9 to P10 per kilogram only,” Alfonso said. “But now that it reached more than P19 per kilogram, we can buy only a portion of what we used to buy.”

What aggravated the situation was the low demand for milled rice.

Recovery for capital is slow, hence money cannot be rolled on for continuous palay buying, Alfonso said. “We are accused of manipulating the buying price of palay to earn more.”

He said: “That’s not true. What we want to do is to continue buying palay so that we can mill and sell rice continuously. Our buying capacity is not that strong anymore.”

The fear of being raided by government agents on suspicion of hoarding is always there, he said. But he said they cannot hoard as they should be regularly supplying their outlets.

Asked about the increase in the buying price of rice, Alfonso said the “noise” about the alleged rice crisis, or very low supply of rice, in the world market created panic and speculation by some traders.

Panic-buying

“There was panic-buying of rice. Speculators also bought rice and kept supplies to be sold later at a very high prices,” he said.

He said government officials also sent wrong signals to the public about the real rice situation. They even surprised the public about the decision to increase the buying price of palay by National Food Authority from P12 to P17 per cavan.

It was only recently that the government announced there was a rice crisis. But it came too late, Alfonso said, adding that prices of rough rice and milled rice were already high.

For rice farmers, it was good as they would now earn more, he said. But for non-rice producers, they would be affected very much especially during the lean months, he said.

As a rule of thumb, the price of milled rice is pegged by the millers at double the buying price of palay.

“If we bought the palay at P17 per kilogram, the price of the milled rice should be P34 per kilogram. But look what’s happening. The buyers prefer the much cheaper rice now,” he said.