NFA wants rice imports from Thailand limited to 100,000 MT

The National Food Authority (NFA) is insisting on limiting its rice importation from Thailand to just 100,000 metric tons (MT) which is part of the concession package Manila granted to Bangkok in exchange for the former’s retention of higher tariff rates on imported sugar.

The Philippines and Thailand are close to completing negotiations for a bilateral agreement that will allow the Philippines to maintain its import tariff on sugar at 50 to 56 percent and even possibly raise this to as high as 80 percent.

Bangkok wants the concession package to include the importation by Manila of at least 200,000 MT of rice from Thailand.

"We feel uneasy about getting such a big volume from a single supplier because we don’t even know how much Thailand will tender in the open market," said Yap.

Out of this year’s projected rice imports of 800,000 MT, the NFA is mandated to buy half while the rest is supposed to be brought in by farmers organizations (FOs).

Thailand, a major rice exporter, is a steady supplier of the country’s rice import requirements. Aside from being a big rice exporter, Thailand is also a leading sugar producer in the region.

Yap said the NFA will still be negotiating with Thailand to determine the pricing scheme for the rice imports.

"We should come up with a pricing mechanism for rice that should be favorable to the Philippine government," said Yap.

He added the final volume to be imported by NFA will be bought under the minimum access volume (MAV) scheme which is the minimum volume of agricultural products that a country is obliged to allow into its market under the World Trade Organization (WTO). Under the MAV schedule, the rice import volume allowed for this year is 207,000 MT. Rice bought under the MAV is slapped a 50-percent tariff while volumes outside of the MAV is 100 percent.

Earlier, Sugar Regulatory Administrator James Ledesma said the signing of the bilateral agreement could take place next month.

The concession given by the Philippine government to Thailand involves importation of a substantial volume of Thai rice this year in exchange for the postponement of a bold cut in sugar tariff that should have been imposed on Jan. 1, 2003.

Under the Association of Southeast Asian Nations Free Trade-Common Effective Preferential Treatment, the Philippine government committed sugar as one of the commodities whose tariff will be lowered to zero percent of the current 50 to 60 percent.

The Philippines however, was able to persuade the AFTA council of which Thailand is a member, to defer the reduction of sugar tariffs to 2010 because the local sugar industry is unprepared to open up the domestic market.