Rice price

This week has been nothing but chaos for rice retailers in the local markets. In a phone interview with Grains Confederation of the Philippines Cebu Chapter President Mayor Teresa Alegado, she said that it is very difficult to implement the president’s order to cap the price of rice. In Executive Order No. 39, regular-milled rice should be sold at ?41 while well-milled rice should be priced at ?45.

It shouldn’t be a problem if their suppliers are selling their stocks at less than the price ceiling. What is challenging now is to sell less than their capital, which would obviously lead them to a loss. In business, you can’t price a product below what you spent to actually acquire it. For some, it seems impossible to adhere to the price ceiling set by the president.

The order is a band-aid solution to the already-bleeding problem. What a wise man would do is to look at the root cause of the problem. What is causing the rise of prices? If we try to nitpick every factor, it has everything to do with inflation. The price of fertilizer, transport cost and many others also continue to rise. By logic, the end product’s price will also follow suit. We are finding ourselves in turmoil.

Alegado’s idea is to rely on imported rice at this time. It is actually smart. The reality is that there is no local rice production at the moment because harvest season is not until the end of the month. If we can acquire imported rice, the tariff should be placed on a moratorium, as in only temporary. This is the reason why wholesalers are selling high because the tariff is also too much. If this will be suspended for a time until prices stabilize, it could actually help not just retailers but the consumers as well.

Even the suggestion to resort to alternative sources of carbohydrates is not a solution. It is still a temporary answer to a bigger problem. They should not dictate what we eat; they should be solving the problem that we encounter with a staple such as rice.

What this administration needs is a set of consultants who can actually study the situation well. Finance experts would say that this is just a basic jigsaw for them. They should be the one at the forefront, addressing our situation.

If there is also another thing to improve, it would be setting clear guidelines before signing an order. The Department of Trade and Industry are pushed against the wall to monitor the prices at the market, even if they know that it is nearly impossible.

Should the palace insist on this price ceiling, then we must prepare ourselves for shortage. Retailers will be forced to keep their stock until the prices return to what it was. Another possible scenario would be to sell all of their stock and not buy rice for the time being. When that day comes, it will be terrible.