The National Food Authority (NFA) warned that rice stocks in government-owned warehouses will be critically low by the end of June if the country will not start the importation process in the next few days.
The agency said that by the end of the month, rice stocks will only be good for two days.
Under the law, the NFA should have at least a 15-day buffer stock at any given time, and 30-day buffer stock during the lean months.
“Based on the projected domestic purchases and rice sales/distribution, NFA stock will be down to just 64,000 MT which will be good for just two days by end of June 2017,” the grains agency said.
The government-negotiated importation of 250,000 MT, which was approved by the previous administration, would replenish the rice inventory but it will not be enough to fill up the needed buffer stock requirement because the lean season starts in July and ends in September.
NFA spokesperson Marietta Ablaza said the available stock can be stretched to last for seven days in July, noting the actual average withdrawals of 2,500 MT per day.
She stressed the need to import the grain, saying it takes 28 days to finish the entire bidding process.
Ablaza noted that despite the low rice inventory, prices of the staple remain stable because of the release of some 54,000 MT withheld in ports.
The local harvest in September would also help beef up the supply, she said.
Meanwhile, sources said that it would take two more weeks before the NFA Council could approve the terms of reference for the importation of 250,000 MT of rice.
“Bad blood between the current NFA leadership and the Council members makes it more difficult in approving recommendations by the NFA management,” a source said.
Another reliable source said NFA Council members are still discussing the proposed terms of reference and that a meeting was set for mid-June.
They expressed fears that the imported rice may not arrive in time for the lean months because of the defiance of the NFA leadership to include specific transparency mechanisms for the government-led importation.
One of the recommendations from the Office of the Cabinet Secretary is the extension of the arrival period for the standby volume to December this year to allow more traders to participate in the bidding.
“To date, only Vietnam has the capacity to supply the rice requirement since Thailand and other rice exporting countries have already finished their harvest season. If the NFA would follow its initial recommendation, this would mean that Vietnam will be the lone bidder if the open tender will be conducted now,” the source said.