NFA taps 4 international firms to import 210,000-MT rice

The National Food Authority (NFA) has awarded four international companies separate contracts to bring in a total of 210,000 metric tons (MT) of rice, a little more than half the 400,000 MT of rice the country is importing in the first semester to build up the country’s buffer stock for the lean months and in preparation for the impending US-Iraq war.

The importation will cost approximately $404 million or about P2.2 billion.

As this developed, NFA Administrator Arthur C. Yap assured the public the country has enough stocks to last at least 93 days.

"We are assuring our countrymen that we have enough rice supply in this great time of anxiety and we have contingency measures that will ensure continuous supply in areas considered vulnerable to rice shortage," said Yap.

From 17 government and private trading companies, the NFA made a shortlist of 12 which later on was whittled down to four, namely state-trading agencies Vietnam Southern Foods Corp. (VSFC) which got the biggest chunk of 150,000 MT and and Malaysian International Trading Corporation (MITCO) which bid for 20,000 MT. Two private trading companies were awarded 20,000 MT each: German firm Toepfer International and Thai firm Chaiyaporn Rice Co.

The lowest-price offer on the 25-percent broken came from Toepfer which offered to bring in the staple at $183.44/MT (C&F), followed by MITCO at $185/MT (C&F), Chaiyaporn at $189/MT (C&F), and VSFC at $194.75/MT (C&F).

Yap said the trading companies are required to source the staple only from China, Thailand and Vietnam.

"We selected these three countries because the volume we are importing are government security stocks, it is our last line of defense in the event of a crisis and it will enable us to aggressively intervene in the market if necessary," said Yap.

Aside from the proximity of these three countries to the Philippines (sailing period is from five to seven days), Yap said the NFA also weighed in other factors such as their track record and reliability as rice exporters and the quality of rice stocks.

In exchange for the awarded contracts, the suppliers are required to forge a countertrade agreement with the Philippine government which should at least be 50 percent of the import value.

Yap said the government is now considering its options on how it will bring in the remaining portion of the 400,000 MT scheduled to come until June, the start of the traditional lean months of rice supply from July to September.

"We are willing to consider all possible alternatives, be it through negotiations with traders or through another competitive bidding," noted Yap.

NFA officials said it is likely that the government will procure the balance of 190,000 MT from Thailand.

The Philippine government is hard-pressed to import rice from Thailand 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 Philippine and Thai governments are set to sign a bilateral agreement that will allow the Philippines to maintain the 50-to 56-percent tariff on imported sugar, and even possibly raise this to as high as 80 percent.