NFA tender fails for .675-M MT rice

05/06/2008

The National Food Authority, the government’s grains importing agency, failed to buy 675,000 metric tons (MT) of rice from Vietnam yesterday which is expected to aggravate the country’s shrinking rice stocks.

The NFA rejected the offer by state-owned Vietnam Southern Foods Corp (Vinafood II), the only company that took part in yesterday’s tender, because it failed to provide a bank guarantee as required, said Rey Villacorta, a member of the NFA bid committee.

The government, however, said it was not worried with the failed bid claiming that the importation is being made to beef up buffer stocks.

Press Secretary and presidential spokesman Ignacio Bunye said the missed purchases would not affect supply of rice in the country.

“Based on the earlier pronouncement of Agriculture Secretary Arthur Yap, the rice from yesterday’s bidding was meant for the buffer stock. This means that the country’s primary rice stocks are already filled and I don’t think this will really affect the rice supply,” he said.

The government can afford to defer rice imports and reenter the market when prices soften, the NFA said.

Additional imports, however, should be secured before the country enters the lean rice months of from July to September.

Thailand, the world’s largest rice exporter, earlier said it will not join the tender amid an expected fresh demand in the domestic market.

The NFA believes rice prices should stabilize soon as some of the major rice suppliers in the region, including Thailand, start harvesting a new crop in the next few months, Villacorta said.

The country, which produces only 90 percent of its rice requirement, has said it may import up to 2.7 million MT of rice this year and so far 1.7 million MT had been secured, mostly from Vietnam and Thailand.

The NFA will hold a country-specific bidding for private sector importers later this month for 163,000 MT of rice. The supply will likely come from China, Thailand, India and Australia.

The Philippines, where rice is the national staple, has been hit hard by the rising prices and the government has been struggling to find ways to ensure that the poor will still have access to subsidized rice.

Pressed if the Arroyo government intends to avail of an emergency fund from the Asian Development Bank, which it offers to countries hit by rice price hikes and supply related problems, Bunye said no.

“The problem is not funding since the country’s finances for the first time in a generation have been strong. The government’s objective is to provide low-priced rice to those who truly need this. We have talked to (Department of Social Welfare and Development) Secretary (Esperanza) Cabral recently. She is just trying to finalize the list of beneficiaries. So far, the local governments have come up with a list comprising 30 percent of the intended recipients,” he said.

Bunye also allayed fears over plans by Thailand, Vietnam, Laos and Cambodia to create a rice cartel, dubbed as Organization of Rice Exporting Countries, saying it would not affect the Philippines.

AFP

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