Jan-Sept palay harvest may hit all-time high of 9.6-M tons

The La Niña rains are boosting efforts to increase rice production with the January to September palay harvest projected to reach an all-time high of about 9.6 million metric tons (MT) and possibly reduce the country’s rice importations this year.

"Based on the projections of the Bureau of Agricultural Statistics, palay production in the first three quarters would be at historical highs on a per quarter basis," said Gregorio Tan Jr., administrator of the National Food Authority (NFA).

Tan noted that rice production in the first quarter at 3.6 million MT was seven percent higher than the same period in 2005, while the second quarter yield is projected to hit 2.9 million MT, 9.6 percent higher than a year 2.8 million MT.

Moreover, the third quarter production spike is projected at 16 percent or 3.096 million MT from the 3.1 million MT level in 2005.

Tan added that while the third quarter crop represents the lean months for rice production, the early rains will allow farmers to harvest rice earlier, and in the process, have enough time to replant for a "palagad" or quick turnaround crop. This allows farmers to harvest twice, the first in early August and the second one in end-September.

Aside from abundance of rainfall, the NFA chief attributed the projected higher yields to increased support by the Department of Agriculture for inputs such as hybrid and certified rice seeds, improved irrigation and judicious use of both organic and chemical fertilizers.

"We have also noticed that more farmers are shifting to hybrid rice and as a result, are harvesting more palay, while others expanded their hectarage to take advantage of the rainfall," noted Tan.

The higher yields according to Tan, also bolster hopes of reducing the country’s rice imports this year. The NFA has been authorized to import as much as 1.8 million MT to fill the production shortfall and for buffer stocking.

To date, a total of 1.495 million MT has been contracted to come in by August, of which 1.43 million MT will come from Vietnam and Thailand, 65,000 MT from the US Public Law 480 commodity grant and 132, 000 MT from countries that supported the Philippines’ bid under the World Trade Organization to maintain quantitative restrictions on rice. Another 100,000 MT could come from re-orders from Thailand and Vietnam suppliers which earlier won contracts to supply rice to the Philippines.

Under NFA’s rice import rules, it can request from its suppliers, a re-order of 25 percent of its original volume bought and get it at the awarded price. This would mean substantial savings for NFA because its buying price will be based on the old price instead of the current market price.

"We are quite optimistic that the good harvests will continue on in the fourth quarter where the bulk of production comes from and with this, we could reduce our rice imports," said Tan.

NFA wants to bring in all of the volume required as early as possible so that it can bring in the commodity when prices are still relatively stable.

Tan said NFA does not want to get caught in a situation when fuel prices soar steadily alongside tight supply as major suppliers like Thailand are positioning to secure their domestic supply. A major buyer, China is also seen to further hike up prices when it pushes through with plans to import its requirements by the second semester this year.

Last year, the rice importations of the NFA have gone up significantly from the 2004 average of $250 to $260 per MT to $280 to $290 per MT in 2005. For 2004-2005, this has cost NFA some P28 to P29 billion.