Chinese businessman bags 900 million pesos worth of imported rice

With all these anomalies happening at the National Food Authority (NFA), it is not of course surprising why food prices are extremely high here in the Philippines. Prices of rice are being manipulated by unscrupulous individuals who are very close to the Powers. And like what we exposed here at NPR, the NFA just admitted that there is a big cartel of rice traders controlling the agency.


Fact is, we learned that a Chinese businessman just bagged the 900 million pesos worth of rice to be imported. This Chinoy is reportedly very close to Malacanang. How did he do it when it is illegal for an individual to import rice without prior knowledge or a permit from NFA? Rice importations are allowed only thru legitimate farmer cooperatives. 


Malacanang should file the necessary charges against rice traders who are part of this huge rice cartel. This is teach them a lesson not to influence the price of this basic commodity.

Rice Cartels in Philippines and Revolutionary Situations

The thing about rice is it is the only confirmed element that affects politics in this country. Traditionally, when you fail in fixing the economy, and fail to anticipate the rise of this basic staple, sure enough, expect a potential crisis in the streets. Marcos experienced that during his term, so does Cory. 


Rice in the Philippines is cartelized. Yes, whatever your government says, it is confirmed--there are seven rice cartels here in the Philippines, all controlled by Filipino-Chinese traders. 


How to disrupt the movement of rice in the Philippines? Deny these traders the ability to procure imported rice from government stocks. Cartels use legitimate rice traders cooperatives or farmers cooperatives to get rice importation permits. These permits are then used to procure rice from abroad. 


What traders do is put aside the whole milled rice with that of the broken. NOrmally, when you buy a kilo of rice, quality is measured on four things:


1. First, aroma.
2. Second, see if the rice is unbroken.
3. Third, see if the rice is clean of debris from milling
4. Fourth, touch if the rice is not powdery


A kilo of rice differs in prices depending on the composition of whole and broken rice. Normally, its 70-30, meaning 70% whole grains with 30% broken ones. The percentage of broken rice decreases if the trader wants to increase price. So price really depends on how small or how little the percentage of broken rice you have in a kilo. If you buy a kilo of whole grain, that is higher than that of all broken rice.


Government, thru the Department of Agriculture, recently set the target rice importation at 700-800,000 tons. The cartel in the Philippines wants it at a million tons. That's why these cartel members are pressuring this government to accede, even dangling juicy offers to DA and NFA officials so that they can make huge profits from the public.


The thing is, its wrong timing. 


Everything already shot up in prices and Filipino consumers are really hard pressed. If this government agrees to increase the price of rice, there will be looting and protests everywhere. People can't afford to buy a 50 per kilo of rice. Imagine if you have 5 or even 10 members of your family, eating 10 kilos of broken rice worth 50 pesos. You can't do.


There is a potential political crisis in the offing for this administration. The only reason the environment is still very much "managed" is the fact that cause-oriented organisations are still allied with this administration. If these groups break from the administration, then, we, my friends, will see a full blown revolutionary situation. 

Sugar sellers want SRP hike while govt already gave contract to import 100,000 tons of sugar

Prices of sugar went from 40 pesos to 60 pesos per kilo this week. While an official of the sugar regulatory administration says that we have enough, the National Food Authority went ahead and allowed the grant of a contract for 100,000 tons of sugar to several bidders. According to reports, there were five who bidded for the contract and they will import sugar from Guatemala, Thailand and even Colombia.

An official of the Sugar Regulatory Administration already intimated over DZMM that several sugar importers and sugar producers are controlling the distribution of sugar. This official said that an artificial shortage is being created to justify importation and possible price hike.

His pronouncement came true. Last Friday, NFA granted the contract for 100,000 tons of sugar and this appeal to hike the SRP.

Despite this, sugar sellers still are appealing government to hike the suggested retail price for sugar. Is this fantastic or not?

There is an impending scandal on sugar which some journalists stumbled upon last week, and this involves several key men of the Aquino administration.

A group is now gathering pieces of evidence. A cartel of sugar importers and producers are trying to fool government.

President Noy should take a look into this and possibly charge those responsible for this artificial shortage of sugar. This cartel involves very close associates of the new administration.

This is as bitter as a burnt sugar.

Rising prices: Main Political Issue in 2010 Elections

A rainy Sunday and what a way to spend time just blogging. Yesterday, I had a chance to spend quality time with my family by just going to the Pasay City public market. Every week, we buy our stuff there and it's an opportunity for me to know first-hand, if prices of goods are rising or stayed the same. And boy, it is definitely rising in such ridiculous fashion.

If you have 1,000 pesos, what that could buy are a few seafoods (I bought octopus for 90 per kilo), a kilo of chicken, a kilo or two of beef, some veggies and eggs. And this would only last for a week. So, for food stuffs alone, you need at least 4,000 pesos per month and this does not include grocery items. For groceries, I normally spend 4-5,000 per two weeks.

I admit that prices are dependent on market forces. It's a push and pull thing, meaning if stocks are plenty, then, lower prices. If stocks are limited, prices are higher. Marketers always make a killing during rainy season, rationalizing that stocks are limited due to difficulties transporting goods from the farm to the market. Of course, they also make those reasons during xmastime. They say people buy so many things and that makes them pricey.

What government does not admit is, they failed in their duty to modernize our food terminals. In fact, we don't have a national food terminal anymore, because government just sold one to a private company a few weeks ago. So, we are left at the mercy of big-time food suppliers who manipulate market prices and the flow of commodities.

So, expect our food prices to go way up, and not down, perpetually. It's the responsibility of the Department of Agriculture, specifically its lead agency, the National Food Authority, to at least ensure that we have enough food stocks. The inability of this agency of government to ensure a steady flow of basic commodities like rice is really revolting. In fact, NFA tolerates those food cartels which sabotages market forces so that we buy these stuff higher than what our Asian neighbours do. So, the proliferation of these food cartels are reasons why we buy food higher than other Asian markets.

That is why the next president should ensure that the security of our food stuffs should be in order. Next year's election is not about democracy nor freedoms. No.

Next year's elections should be decided on the best agenda or platform for food security. There are ways on how to lower prices of goods, like food stuffs and energy (oil, electricity and water) but the Chief Executive simply do not do what is necessary because of political expediency.

So, the mantra that definitely would appeal to the electorate this elections is this---lower prices of basic commodities. (By the way, 49% of Filipinos especially those of voting age, consider this the main issue, according to the National Statistical Coordination Board)

Worsening economic situation being felt in RP

Expect prices of NFA rice to rise from the present 18 pesos per kilo to about 33 pesos. NFA is currently thinking of hiking the price of NFA rice to curb an expected 39 billion peso loss due to subsidizing the precious staple. A rice price hike would surely mess up the market prices particularly of commercial rice which is being retailed at prices between 39 to 60 pesos per kilo. If this plan pushes through, how will the poor cope up with this?

Also, analysts are predicting that the peso will breach the 50 peso per dollar mark before the year ends. That's good news for OFW's but bad news for business. Companies who rely on imported products may have to fork out more pesos to buy their stuff. Surely, that would impact on inflation, as generally companies would put the extra expense to consumers. Again, the domino effect--higher prices means higher inflation which may put a damper to the efforts being made to at least make the economic environment viable as an investment site.

Lastly, I'm seeing a noticeable decrease in local tourism due to the worsening economic situation. People are cutting back on travel expenses due to higher transpo and gas prices. Malls are benefitting from the cutbacks since people are milling to malls more than usual. The impact is obvious--lower tourism revenues mean decrease in government funds. Possible net effect--loss of jobs and bankruptcy among resorts and tourist-related industries.

Jueteng before, rice cartels today

Sources from the intelligence community revealed that some jueteng lords have now shifted to rice cartelization. Yes, after a massive and serious campaign against the illegal numbers game, some big-time jueteng lords have allegedly colluded with rice retailers and formed their own cartels in the provinces. For the benefit of mamang pulis, these areas are the following:

1. Pangasinan--they are using some cooperatives in buying NFA rice for "conversion"
2. Isabela--they have a big cooperative which they use for buying NFA rice again for "conversion"
3. Nueva Ecija and Nueva Viscaya--the same modus operandi. Some even have importation permits
4. Quezon, Cavite, Davao, Cebu

These syndicates have big warehouses (not bonded) in those areas. Go to Quezon province. They have big warehouses there full of sacks and sacks of rice, converted already from NFA and imported rice. In Valenzuela, Malabon and Caloocan, there are huge warehouses there of illegally imported rice.

I dare NFA administrator Jessup Navarro to release to the media a list of all those rice retailers whose licenses were revoked. I also asked DA Secretary Art Yap to reveal the list of these big-time rice traders to the public. If, as he says, his father-in-law Jim Gaw is not involved in rice or cereals trading, then, as a gentleman, he must "clear" his father-in-law of all complicity by being transparent in his revelation of this list. Not doing so would definitely tarnish his image and credibility.

It is also quite suprising why Yap just called his father-in-law to ask if he's involved. I don't believe this. Likewise, I think it is time for Yap to resign since all the big-time rice traders are Chinese. Yes, they are Chinese. There's nothing wrong with Chinese businessmen transacting here in our country. But, if they do these things---cartelization--then, they better leave this country and don't come back.

So I say--reveal the list now!