NFA sets tender for 600,000-metric tons rice importation

MANILA, Philippines - The National Food Authority (NFA) announced yesterday a bidding on Dec. 8 for 600,000 metric tons (MT) of imported rice.

This will bring to 1.45 million MT the food agency’s total advance rice importations for 2010. The NFA awarded last Nov. 4 the importation of 250,000 MT and has scheduled a bidding for 600,000 MT on Dec. 1.

At the pre-bidding conference yesterday, NFA officials led by Deputy Administrator Ludovico Jarina and Assistant Administrator Jose D. Cordero said the projected producion shortfall for 2010 has been estimated at 1.45 million MT.

Damage to rice crops from the series of storms that have hit the country so far is placed at 845,000 MT.

Based on those two figures, the NFA’s rice importation could reach 2.245 MMT, excluding buffer stock. 

Cordero said that the grains agency likes to maintain a 25 day buffer stock which adds up to 900,000 MT based on a daily consumption requirement of 36,000 tons. 

Jarina said that the NFA decided to conduct the additional rice tenders this early while prices are soft.

Based on the average price computed by the NFA following its Nov. 4 rice tender, the prevailing average price is $530 per MT.

 The NFA, Jarina said, is hoping that those price levels “will hold and will not increase.”

“We are trying to do forward buying for next year because the effects of typhoons Ketsana and Pepeng might be worse than expected,” said NFA spokesman Rex Estoperez.

Buying at this time could keep prices in check since major exporters, such as Thailand, are holding huge stocks of rice. The government could also be trying to lock down supplies before presidential elections next May.

“We want to get low rice prices... Prices will climb (later) because India is entering the market,” Romeo Jimenez, director for marketing operations at the NFA, told Reuters.

Traders expect India, normally a major exporter, to buy as much as three million tons for its 2010 rice supply after severe weather ravaged its rice fields this year.

Jimenez said the government has so far bought only 300,000 tons of paddy rice from farmers, way below its target of one million tons this year.

“We’ll be lucky if we’re able to buy 500,000 tons,” he said about the NFA’s local rice purchases this year. Jimenez added Manila’s imports of the grain were meant to cover the volume lost from the typhoons and protect a government stockpile of 15 days of consumption.

The agency said the country’s total rice imports for 2010 might reach 2.1 million tons, including 200,000 tons to be brought in by the private sector, higher than its total purchases this year of 1.775 million tons.