Philippines Plans to Import Additional 250000 Tons of Rice Through G2G Negotiations

By | June 16, 2015

Rice HQ

The National Food Authority (NFA) of the Philippines is planning to purchase the additional 250,000 tons of rice, it is still authorized to import this year in case of production uncertainties due to drought-inducing El Nino weather pattern, in government-to-government (G2G) deals, according to BusinessworldOnline.

The NFA Public Affairs Director told reporters that the agency is planning to import the remaining volume of rice in G2G deals through negotiated procurement. He noted that Thailand, Vietnam and Cambodia, which hold bilateral agreements with the Philippines, have been invited for G2G negotiations next week.

The official also noted that the NFA is also reportedly considering to conduct G2G rebidding for the remaining 100,000 tons from the June 5 tender on June 16. Though the NFA invited tenders from Vietnam, Thailand and Cambodia for 250,000 tons, it imported only 150,000 tons from Vietnam. Thailand backed out from the tender as the price offered by the NFA was deemed to be too low. Cambodia did not participate in the bid. He added that Vietnam is required to ship about 60% of the 150,000 tons before July 15 and the remaining before August 15.

The decision reportedly follows the Philippine Statistics Authority’s (PSA) forecasts that the Philippines’s 2015 second quarter (April – June) production to decline by about 4.3% to around 3.898 million tons from last year’s 4.073 million tons and about 0.1% from its April forecast of around 3.902 million tons due to a decline in harvest area prompted by dry spell and insufficient water supply as well as incidence of pests and diseases in some rice growing areas.

Last month, the PSA forecasted paddy production in the first half of 2015 (January – June) at around 8.27 million tons, down about 1.32% from around 8.38 million tons last year.

Last week, the NFA told that it is planning to import 805,200 tons of rice through private importers under the WTO minimum access volume (MAV) rule at 35% duty. Imports over and above the MAV quota attract a 50% duty. The NFA is likely to open the applications for MAV any time this month and traders are expected to deliver rice between September and October.

Earlier this year, the Philippines imported 500,000 tons of rice from Vietnam and Thailand this year to curb price increases and boost buffer stocks during the lean season (July – September). Last year, the NFA imported more than 1.8 million tons of rice (including 1.5 million tons of 2014 imports and 300,000 tons of 2013 residual imports) in 2014 to replenish rice stocks and control price hikes.

USDA estimates Philippines MY 2015-16 (July – June) paddy rice production at around 19.683 million tons (around 12.4 million tons, basis milled), slightly up from around 19.365 million tons (around 12.2 million tons, basis milled) produced in the previous year. It estimates the Philippines to import 1.7 million tons of rice in 2015.