The National Food Authority (NFA) is set to award contracts to Thailand and Vietnam for the supply of 500,000 metric tons of rice following Friday’s government-to-government bidding.
Piolito Santos, chairman of the Special Bids and Awards Committee, said that the NFA Council would recommend the results of the G2G offers – with Thailand winning 200,000 MT and Vietnam to supply 300,000 MT – for the final approval of NFA Administrator Renan Dalisay.
Santos also said that they expect to complete the issuance of notice of award no later than March 3, while the signing of contract will follow on March 4-10.
“By March 11, we will already give the winning bidders the notice to proceed to the delivery of the rice,” the official added.
A G2G transaction requires an existing executive agreement for a country to participate in the bidding of the rice. At present, only three countries – Vietnam, Thailand and Cambodia – have existing rice purchase agreement with Manila.
Under the terms of reference, the state-run grains agency will buy 250,000 MT of 25 percent broken and 250,000 MT of higher-grade 15 percent broken well-milled long grain white rice.
NFA’s bid specifications require bidders to deliver 50 percent of the volume to be awarded not later than March 31, 2015 and the other 50 percent not later than April 30, 2015
In Friday’s G2G tender, Thailand offered $441 per MT for 100,000 MT of well-milled long grain white rice with 15 percent broken grains, and another 100,000 MT at 25 percent broken for $421 per MT.
Vietnam, on the other hand, tendered an offer for the entire 500,000 MT, comprising 250,000 MT (15 percent broken) at $442.50 per MT, and 250,000 (25 percent broken) at $424.50 per MT. Cambodia, the other eligible supplier, did not join the bidding.
With Thailand only able to secure a total of 200,000 MT for both 15 and 25 percent broken, Vietnam has agreed to match Bangkok’s bid price offer to be able to supply the remaining 300,000 MT.
Malou de Leon, marketing officer for the Royal Thai Embassy in Manila, said that they were not able to bid for higher volume because of existing supply commitments to other countries.
She also said that restrictions in the terms of reference for the bidding have barred them to renegotiate for higher volume.
Manila is importing a total of 500,000 MT of rice through G2G to meet stock requirement before the start of the lean season in July.
The state-run grains agency is required by law to have at least 15-day buffer stock at any given time, and 30-day buffer stock during lean months. Traditionally, lean season in the Philippines starts in June and ends in September. With stocks dipping below the mandated volume, the NFA is now resorting to importation anew to beef up its inventory.
Last year, the Philippines’ rice importation exceeded 1.7 million MT, the biggest under the Aquino administration, and close to the 2009 level of 1.8 million MT. James Konstantin Galvez