Thailand, Vietnam bag NFA rice supply contracts

MANILA, Philippines - The National Food Authority (NFA) has awarded the supply contract for the importation of 500,000 metric tons (MT) of rice for buffer stock to Thailand and Vietnam, food security chief Francis Pangilinan said late Monday.

Pangilinan said the NFA Council has issued a notice to proceed for the deliveries, the first tranche of which is expected to arrive in the third week of this month.

“We have already issued the notice to proceed for both Vietnam and Thailand. The delivery is scheduled for the third week of October,” he said late Monday.

The notice to proceed, he said, was issued a day after the special meeting of the NFA Council held on Sept. 30 during which the offers submitted by Thailand and Vietnam were approved.

Thailand submitted the best offer for the procurement of 500,000 MT of rice under a government-to-government procurement mode.

The NFA received on Sept. 15 supply offers from Thailand, Vietnam and Cambodia, all of which have rice procurement agreements with the Philippines.

Thailand, represented by its Department of Foreign Trade offered a selling price of $475 per MT for a total supply of 300,000 MT against a required minimum supply offer of 200,000 MT.

Vietnam, on the other hand, offered $479 per MT for a total supply of 400,000 MT.

Cambodia was disqualified from participating in the offer because it could not conform to the delivery period stipulated in the terms of reference, as it would only be able to deliver in April 2015.

Pangilinan said Vietnam agreed to match Thailand’s price offer to be able to supply the balance of 200,000 MT.

“Under the terms of reference, if the entire 500,000 MT is not completed, the next lowest bidder can be asked to match the lowest bid. Vietnam agreed to match it for the remaining 200,000 MT,” he said.

The terms of references stipulates the delivery of well-milled white rice with 25 percent brokens in three tranches between October to December. The supply must be fresh-milled and harvested between January to August 2014.

The first 40 percent of the volume must be delivered by this month, the next 40 percent by Nov. 15 and the remaining 20 percent by December.

The NFA special bids and awards committee on Aug. 27 rejected all bids for the importation of the 500,000 MT buffer stocks as all offers were way below the government budget of P456.60 per MT.

Bids submitted by importers LG International, Vietnam Northern Food Corporation (Vinafood 1), Louis Dreyfus Corp., and Vietnam Southern Food Corporation (Vinafood II) ranged from $460 per MT to as high as $496.75 per MT.

The government is striving to bring in the volume within the year to bolster the buffer stock and drive down prices of commercial rice.