Monday, March 2, 2009

Palay Buying Business

UPDATE: I bought this manual from TRC e-library. It provides more information about Rice Prices, Income and Competitiveness. Just download it here.


I've been thinking of a new business and this is the first on my list. I choose to venture on this trade because most of my kakilalas are doing good, and our town is considered as class C, so I might as well take advantage of our being an agricultural-type town.

They say that this is a good trade, though seasonal, specially if you have enough working capital. Some say you can start off with a minimum of P50,000 - P100,000. If ever I venture into this business, maybe I will focus on wet palay, stock up and wait for the price to go up then sell. (Well, I don't know if it's a good strategy).

Are you aware of informal credit financing, also called as kabanan or pasung? This is practiced by some farmers and traders especially in provinces. Farmers do not have access to formal financial institutions (banks) and kabanan plays an important role in the buying of palay. With this, you can lock-in the availability of palay when harvest season come.

Anyway, here are some basic info for palay buying:

  1. Ample working capital for financing to farmers.
  2. Reliable and good quality source of palay from farmers or cooperatives.
  3. Reliable rice miller to sell your palay, and with price support from them in time when prices are going down.
  4. Ample spaced warehouse with solar dryer pavement for starters.
  5. If one has enough capital for initial investment, it is best to invest in grain dryers to have consistent quality palay so you can demand for selling price premium.
  6. Hands-on management of the buy and sell business.
  7. Margin is small so volume is a must.
  8. Knowledge in palay classification is a must.


1 comment:

menmen said...


can you give additional info regarding this business? thanks!

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