"The volume will augment the 488,000 metric tons that will be coming in tranches in the first quarter," said NFA Administrator Gregorio Tan Jr.
The NFA expects an initial volume of 87,500 MT to be be unloaded in Manila by end January, the next 175,000 MT will come in by February while the balance of 87,5000 MT should be in by March. Most of the stocks will be coming from Vietnam.
This should bring NFA rice imports in the first quarter to 750,000 MT. The remaining volume will be brought in by the private sector and farmer groups that were allocated an import volume of 138,000 MT. The private sector is expected to bring in the additional volume by May 31, when the onset of the lean season for rice begins.
Tan said the NFA wanted the additional volume to come in early so the government could take advantage of lower prices in the world market.
Currently, the benchmark for rice imports is pegged at $274.5 per MT, compared to last year’s $282 per MT during the same period when prices soared due to higher fuel prices.
Tan said the imports will support the current warehouse inventory of the NFA which is likely to fall below the comfortable 15-day stock as improved farmgate prices of palay, now averaging P10 per kilo, are prompting farmers to sell to traders which offer slightly higher prices than the agency.
"We were anticipating favorable palay prices with the harvest season and expected farmers to unload their produce to the traders. On the other hand, with supply being sucked up by traders, we have to also ensure that prices will remain reasonable and supply is adequate," said Tan.
Tan said the national rice consumption has increased to 30,000 MT daily from the previous year’s 29,000 MT as the population keeps on increasing. Per capita consumption is now at the level of 115 kilos from only 109 kilos in 2005.
The NFA which last year imported a total of 1.8 million MT of rice due to the lingering effects of the El Niño phenomenon, wants to further frontload its rice import requirements for 2006 in view of the anticipated recovery in fuel prices that drove up fuel and transport costs of rice in 2005.
"While fuel prices have gone down, we expect this to recover shortly and to again affect rice prices. We also have to position early on because of the projected tightness in world stocks next year," said Tan in a previous interview
The world’s biggest rice exporter, Thailand, temporarily suspended its exports in September-October to secure its domestic requirements.
On the other hand, China’s rice imports have been steadily increasing in recent years and is expected to raise its import volumes to feed its burgeoning population while its rice farmers have been shifting to planting high-value commercial crops.
These developments will have far-reaching implications for rice net importers like the Philippines.
Last year, the rice importations of the NFA have gone up significantly from the 2004 average of $250 to $260 per MT to $280 to $290 per MT in 2005 . For 2004-2005, this has cost NFA some P28 to P29 billion.