NFA auction raises P936.5M, frees warehouses

The National Food Authority (NFA) generated more than its expected earnings from the sale of aging rice stocks last week, while also opening up critical warehouse space ahead of the peak harvest season.

Data from the agency showed that nearly 90 percent of the total rice volume offered was sold, bringing in P936.5 million. The amount exceeded the P912.4 million revenue target set for the entire lot.

Department of Agriculture (DA) Secretary Francisco P. Tiu Laurel Jr., who also chairs the NFA Council, emphasized that the outcome goes beyond the cash raised. “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,” he said.

NFA administrator Larry Lacson likewise welcomed the strong response from buyers. “We are very pleased with the results, which allowed us to raise P936.5 million compared to the target amount of P912.4 million from the entire lot,” Lacson said. “We basically sold a total of 32.5 million kilos of rice at an average price of P28 a kilo.”

The rice tender covered 737,339 bags of milled rice, each weighing 50 kilos, stored for periods ranging from three months to over 18 months. Floor prices were adjusted based on how long the stocks had been kept in storage, starting at P25.16 per kilo for rice stored between three and six months and going as low as P22.52 per kilo for stocks held for more than 18 months.

Out of 83 lots offered, 57 were successfully awarded, representing 604,364 bags or about 88 percent of the total volume. While 39 groups purchased bidding documents, only 19 are expected to complete the contracts, subject to final validation of bid papers.

The average selling price of P28 per kilo was higher than the minimum set rates, indicating steady demand despite the age of the stocks.

In a similar auction held in December, the NFA disposed of 315,000 bags, with prices settling within the expected floor range.

With additional funds and newly available storage capacity, the NFA is preparing to increase its procurement of palay from local farmers. The agency has set a buying price of at least P17 per kilo for wet palay and P21 per kilo for dry palay.

The dry harvest season is projected to peak between April and May. The agency intends to use its expanded warehouse space to absorb more local produce, support farmgate prices and maintain sufficient buffer stocks as supply increases in the coming months.