NFA rice bidding fails again

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Now eyeing higher priced grains from Vietnam
Manila is considering buying higher priced rice from Vietnam to supplement its buffer stock requirement during the lean season after another government-to-government tender failed.

On Tuesday, the National Food Authority (NFA) auctioned the remaining 100,000 MT of rice, untaken from the previous G2G tender. The volume represents a little more than three days of supply for the entire country, which consumes about 31,000 MT of the grains per day.

The NFA rejected initial offers from Cambodia, Thailand, and Vietnam that exceeded the government’s price ceiling of $408.14 per MT of 25 percent broken well-milled long grain white rice.

Thailand offered $418 per MT for 100,000 MT; Vietnam $417 for 100,000 MT; and Cambodia $464 per MT for 50,000 MT.


During the second round, Thailand backed out of the bidding, saying that the Philippine government’s reference price was too low versus the average prevailing price on the world market.

On the other hand, Cambodia offered $455.50 per MT for the supply of 50,000MT, while Vietnam offered $416.85 per MT for the supply of 100,000 MT – both offers still stood beyond the price ceiling set by the NFA Council.

Patricia Galang-de Jesus, executive assistant to the NFA administrator, said they may accept the re-offer price from Vietnam, noting that the terms of reference for the G2G procurement allow the NFA Council to consider accepting the “lowest price” offer.

“We are deferring the decision on the matter. Under the TOR, the said revised offers will be evaluated based on the lowest price. We neither accept nor reject the offers, we are referring the matter to the NFA council for their decision,” de Jesus told reporters.

“The NFA Council drafted the TOR. It is possible that could it be considered by the NFA. We will report whatever happened today to the Council to make it official,” she added.

Presidential Adviser on Food Security and Modernization (PAFSAM) Secretary Francis Pangilinan, who is also the chairman of the NFA Council, said that they would meet on Wednesday to decide on the matter.

“Wala pang decision [there has been no decision yet]on whether failed bidding or not. Not until the NFA Council declares it so,” Pangilinan said.

The PAFSAM chief further said that the G2G importation is exempted from the procurement law on public bidding, stressing, “It is not a bidding but an offer to sell and to procure subject to a meeting of the minds of both governments.”

NFA deputy administrator Joseph dela Cruz, however, said that it is unlikely that the NFA Council would approve the re-offer price from Vietnam, saying that it may set a bad precedent for future biddings.

“Any price beyond the reference price set by the NFA should be rejected or not accepted. There is no basis and we will be subject to questions by the Commission on Audit,” said dela Cruz, who is also the chairperson of the G2G Procurement Committee.

“The price offers are beyond or above the reference price. What term should we give other than failure [of bidding]?” he asked.

The Philippines is importing a total of 250,000 MT of rice through G2G to meet its stock requirements before the start of the lean season in July. The state-run NFA is required by law to have at least 15-day buffer stock at any given time, and 30-day buffer stock during the lean months.

Traditionally, the lean season in the Philippines starts in June and ends in September.

The NFA currently holds a buffer stock of 750,000 MT of rice, enough for the next 24 days, De la Cruz said. He added that the 100,000 MT rice to be imported by the NFA could add a little more than three days of supply for the entire country.

“It’s just that we need to beef up and increase our buffer stock for the lean months in line with our commitment to the government policy that every July 1 we should have at least 30 days. We need to be compliant with our commitment to good governance,” he added.

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