MANILA—The National Food Authority (NFA) has disposed of close to 90 percent of its aging rice inventory through a public auction, generating proceeds higher than projected and creating additional storage capacity for fresh palay purchases.

Agriculture Secretary Francisco P. Tiu Laurel Jr., who chairs the NFA Council, said the outcome was encouraging, noting that warehouse space cleared by the sale would allow the agency to procure more palay from local farmers at fair prices.

“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 said the tender surpassed the agency’s expectations.

“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 NFA is currently validating bid submissions before finalizing all sales contracts.

A total of 737,339 50-kilogram bags of milled rice, stored for periods ranging from three to more than 18 months, were placed on the auction block. The agency set minimum prices depending on stock age, starting at P25.16 per kilo for rice kept for three to six months and going down to P22.52 per kilo for stocks stored beyond 18 months.

Out of 83 lots offered, 57 lots—equivalent to 604,364 bags or 88 percent of the total volume—were successfully awarded. Thirty-nine prospective buyers obtained bid documents, with 19 expected to complete contracts.

The NFA plans to use the newly available warehouse space to store palay it will purchase from farmers at a minimum price of P17 per kilo for wet palay and P21 per kilo for dry palay. The dry harvest season is expected to peak between April and May.

The average selling price of P28 per kilo exceeded the set floor prices, reflecting strong demand despite the age of the stocks. In December, the NFA auctioned 315,000 bags of aging rice, with prices falling within the P22.52 to P25.16 per kilo range.

With additional funds and expanded storage capacity, the agency said it is preparing to increase its market intervention efforts during the harvest season to help stabilize farmgate prices while maintaining manageable buffer stocks.