Price Transmission and Market Segmentation in the Philippine Rice: A Correlational Analysis of Regional Yields and Quality-Based Price Spreads

This study conducted a detailed scan of the National Rice Market. It gave a region-by-region analysis, using average yields in palay and the 'money price' paid at harvest for different types of fine rice to determine whether the market was fragmented. This study used a correlation analysis to find the relation between the average yield of palay, the average wholesale price, and the spread in retail-level prices. The outcome is that there was no significant correlation between average wholesale price and average palay yield, indicating production factors may not be the main determinants of the retail price of rice. However, there were significantly positively correlated average wholesale prices and prices spread for premium rice and well-milled, indicating that an effective relationship is maintained between wholesale and retail prices for these types of rice. However, regular milled rice doesn't have a significant relationship. In addition, different types of rice had regional price differences. This revealed possible price inefficiencies, disruptions to the market, and various ways of fixing prices for rice quality in the Philippines. The lash-up of supply and demand relationship dynamics and its governmental intervention resulted in the Rice Pricing pattern in the Philippines. The study's findings can be utilized to address market inefficiencies in the rice market of the Philippines and assist in creating a reform roadmap through the adoption of the recommended policy in this study.