Palay Prices Up Slightly In March

The average farm-gate price of palay (unmilled rice) per kilogram (kg) posted back-to-back increases as it went up by 2.1% to P18.57 in March 2023 following an increase from the previous month, the Philippine Statistics Authority (PSA) reported.

Photo Insert: The quarter's average palay farm-gate price registered an annual increase of 4.2% in comparison to the P17.43 average farm-gate price per kg in the same quarter of 2022.

The figure is slightly higher than the P18.19 average farmgate price per kg posted in February this year.

The palay price in March is a 6.5-percent increase from the P17.43 average farmgate price per kilogram posted in the same month last year. During the second month of the year, the farm-gate price of palay also increased by 2.6% to P18.19 per kg from its price level of P17.73 in January 2023.

The Ilocos Region recorded the highest palay farm-gate during the month at P20.83 per kg while the lowest was recorded in Eastern Visayas at P16.49 per kg.

According to the PSA, annual growth rates for palay farm-gate prices for all the regions increased in March 2023 with the Ilocos Region posting the highest annual increase of 11.6% while Northern Mindanao registered the lowest increase of 0.5 percent.

On a monthly basis, 12 regions posted increases in the average palay farm-gate prices, while four regions including Mimaropa (Region 4B), Eastern Visayas, Caraga, the Bangsamoro Autonomous Region in Muslim Mindanao posted decreases for this month.

The highest monthly growth rate was recorded in the Cordillera Administrative Region at 10.5%, while the fastest decline of 13.3% was recorded in Eastern Visayas.

On the national level, the average farm-gate price of palay for the first quarter of 2023 was P18.17 per kg, an increase of 3.9 percent from the previous quarter's average farm-gate price of P17.49 per kg.

The quarter's average palay farm-gate price registered an annual increase of 4.2% in comparison to the P17.43 average farm-gate price per kg in the same quarter of 2022. The highest average farm-gate price for this quarter was recorded also in the Ilocos Region at P19.81 per kg, while Caraga posted the lowest at P16.91 per kg.

Analysts, like Rizal Commercial Banking Corp. Chief Economist Michael Ricafort, said that higher palay farm-gate prices, both monthly and per year, may reflect the higher cost of inputs and higher inflation since last year.

"Also, partly due to higher world prices in recent months due to warmer weather and drought also experienced in some ASEAN/Asian countries that partly reduced rice production," Rucafor added. (ASEAN refers to the Association of Southeast Asian Nations).

"El Niño drought expected later this year up to the first quarter of 2024 could potentially reduce palay production and could lead to some pick up in prices, as rice accounts for nearly 10 percent of the inflation," said Ricafort.

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