Thailand, Vietnam Set to Supply 250,000 T of Rice to Philippines

A man carries on his head sacks of rice at a food market in Paranaque, Metro Manila Philippines. (Reuters Photo/Erik De Castro)

By : Enrico Dela Cruz | on 1:00 AM September 01, 2016
Category : International, SE Asia

Manila. Thailand and Vietnam won deals to supply a total of 250,000 tonnes of rice to the Philippines at a tender on Wednesday (31/08) after revising down their offers to just within Manila's budget.

The tender, the first under the two-month old government of President Rodrigo Duterte, is part of the state's plans to import up to 1 million tonnes of rice to secure supply of the food staple through next year while prices are low.

Thailand will supply 100,000 tonnes of 25-percent broken rice at $424.85 a tonne, while Vietnam will export the remaining 150,000 tonnes at the same price, according to officials at the Philippines' National Food Authority (NFA). That includes freight, insurance and other costs.

Despite the tender by the Philippines, one of the world's top rice buyers, Vietnam's benchmark 5-percent broken rice prices fell this week to $345-$360 a tonne, on a free-on-board basis, the lowest in 11 months.

The NFA initially rejected higher bids from both countries and asked them to submit revised offers in line with its reference price of $425 per tonne.

The award of the contracts is subject to approval by the inter-agency NFA council, said NFA spokesman Angel Imperial.

An average of 20 typhoons pass through the Philippines each year, hitting the Southeast Asian country's rice production and forcing it to import any shortfall to feed its 100 million people.

Imports last year reached around 1.8 million tonnes, below a record volume of 2.45 million tonnes in 2010.

"We need sizable import volume to boost our stocks and prepare ourselves for any emergency situation," Imperial told reporters.

He said the agency's buffer stock as of Aug. 24 was good for only 21 days of domestic demand, below the minimum 30 days required during the lean harvest season from July to September.

Last year's import volume included around 500,000 tonnes shipped in by private traders. The NFA every year farms out import permits for private traders to bring in up to 805,200 tonnes of rice at a 35-percent tariff.

Reuters

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