PH set for rice import negotiations with suppliers

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The National Food Authority (NFA) Council said the government is set to start negotiating now with countries that have existing executive agreements with the Philippines over its approved import of 250,000 MT of rice intended for the last quarter of 2015 and 500,000 MT for the first quarter of 2016.

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NFA Administrator Renan Dalisay said the government will try to take advantage of the currently low and stable rice prices in the world market. Rice prices could jump once global demand surges at the height of the El Niño dry spell, he added.

Only three countries – Cambodia, Vietnam and Thailand – have existing rice purchase agreements with Manila.

Dalisay explained that the Food Security Committee (FSC), which has authorized the imports, initially approved the standby authority to import 250,000 MT of rice to preposition its food security stock before the yearend. But upon recommendation by the El Nino Task Force, the interagency body raised the amount by a further 500,000 MT to meet the projected deficit in production at the start of 2016.

Drought due to El Niño is expected to intensify beginning October this year and last until May 2016. DOST-PAGASA in its forecast likened the severe impact of the current drought to what happened in 1997-1998, when it caused a 24 percent drop in the country’s local palay production.

According to the forecasts, the country’s traditional rice granaries such as Isabela, Mindoro, Quezon, Albay, Aklan, Antique, Iloilo, South Cotabato, Sultan Kudarat, Zamboanga are among the provinces that will be hardest hit by El Niño.

The NFA chief said deliveries of the grains will be done on a staggered basis. For the 250,000 MT standby authority, shipment will be split into 125,000 MT by end of November and 125,000 MT by end of December this year.

Meanwhile, shipment of the 500,000 MT intended as part of the country’s rice supply for 2016, will be scheduled as follows: 175,000 MT by end of January, 175,000 MT by end of February and 150,000 MT by end of March next year.

Dalisay said invitations to bid have been sent to Thailand, Vietnam and Cambodia for the supply of 250,000 MT well-milled rice intended for this year and 500,000 MT well-milled rice for 2016 under a government-to-government procurement scheme.

For this year, the FSC and the NFA have arranged for the importation of 1.8 million MT – including 500,000 MT contracted in February; 150,000 MT and 100,000 MT contracted in June; 187,000 MT MAV-Omnibus Origin private import and the 600,000 MT allocated volume for the MAV-Country Specific Quota opened in July; and the 250,000 MT to be contracted this month.

Dalisay said the total volume of rice import is within the estimated deficit in the country’s palay production of 18.86 MMT, or 12.26 MMT rice equivalent, and the country’s consumption requirement with 30-day mandated buffer stock at the start of the lean month season.

The Philippines, the former world’s biggest rice importer, allowed importation of a record 2.4 million MT of rice in 2010. The order was reduced to 860,000 MT in 2011, and trimmed further to 500,000 MT in 2012.

In 2013, Manila approved 205,700 MT of rice imports under the omnibus minimum access volume for rice, plus 500,000 MT of rice from Vietnam. Last year, the Philippines imported more than 1.7 million MT of rice.

For this year, the government has approved a total of 1.8 million MT of rice imports, including the 500,000 MT rice awarded to Thailand and Vietnam in February; 500,000 MT approved for the lean season and reserve volume; and 805,200 MT private sector imports under the so-called minimum access volume. It was also the biggest under the Aquino Administration, and roughly the same level as 1.8 million MT rice imported in 2009.

The NFA Council is chaired by Secretary Francis Pangilinan of the Office of the
Presidential Assistant for Food Security and Agricultural Modernization (OPAFSAM).

Members include the Bangko Sentral ng Pilipinas (BSP), Development Bank of the Philippines (DBP), Land Bank of the Philippines (LBP), Department of Finance (DOF), Department of Trade and Industry (DTI), National Economic Development Authority (NEDA), National Food Authority (NFA) and a farmers’ representative.

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