Increase in rice prices related to oil price hike, not on supply, NFA explains

By BONG PEDALINO (PIA Southern Leyte)
March 26, 2008

MAASIN CITY  –  When the pump prices of oil products go up, everything goes up, including the price of rice, according to Mario Cayanong, the provincial manager of the National Food Authority (NFA) based in this city.

In an interview over the phone on Tuesday, Cayanong told PIA there has been no problem in the supply of the basic food commodity in his area of coverage, which is the whole of Southern Leyte province up to Baybay, Leyte, stressing that the current steep increase in rice prices was caused by the high cost of fuel.

The NFA has maintained its consumer price at P18.25 per kilo of rice, even as the commercial counterparts sold in the market have gone up lately, something which the NFA can only monitor and not control, Cayanong said.

He disclosed that at present, the NFA warehouse in their office at barangay Canturing this city contained 14,000 bags, while the Baybay warehouse has 6,000 bags, and on top of that another shipment of rice stocks is coming by the first week of April, implying no shortage of the staple food.

But even as Cayanong attributed the sharp increase in rice prices to the oil price hikes, he had appealed to the retailers not to take opportunity of the situation by substantially padding the mark-up of the tag price, a call that was listened but apparently not heeded, he observed.

By his own calculation, a commercial rice cost only P12.00 from the producing farmers, so at most this can be retailed to only P24.00 to end-users, but as it is the tag price has been nearing – and others are breaking – the P 30.00 per kilo mark.

He, however, discounted any possibility of hoarding, saying categorically that there was no incident of hoarding in his area.

As to charges that some retailers deliberately mixed the NFA rice with commercial ones, Cayanong said this has been a hard case to prosecute since no one came forward to testify despite widespread rumors of such a malpractice.

On overpricing of NFA rice, they had found out at least three violators in December last year, and recently four violators in Pintuyan, and only last Wednesday a retailer was found out doing so and, in fact, a summon was already sent.