Thailand fails to renew rice supply deal with Philippines

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The Philippines, which has announced plans to import rice this year, has not received Thailand’s application to renew its rice supply contract after it expired in December 2013.

“We have already written a letter informing the Thai government of the renewal of the rice supply deal. But as of today, they have not yet issued an application to renew the executive agreement,” Dennis Arpia, chief of staff at the office of National Food Authority (NFA) Administrator Orlan Calayag, said in a telephone interview.

Thailand’s four-month political crisis has paralyzed government functions, including Congress approvals of the renewal of trade agreements.

Bangkok had offered to sell rice at a huge loss to be able to pay farmers under its rice intervention scheme.


However, failure to renew the rice supply agreement effectively disqualified Thailand from joining Manila’s planned government-to-government rice transaction this year.

“We will consider any good offer from Thailand, but they will need to renew the supply agreement before the deadline,” Arpia said.

Only two countries—Cambodia and Vietnam—remain with existing rice purchase agreements with the Philippines.

Agriculture Secretary Proceso Alcala said the department is considering conducting an open bidding in which private suppliers may join.

“This is one of the options being considered by the NFA Council,” Alcala said on the sidelines of the 2014 Philippine Economic Briefing in Pasay City.

An open tender would allow as many foreign private entities outside the current bilateral agreement to bid for the supply of Manila’s rice requirement.

The Philippines earlier said it might import 800,000 metric tons (MT) of rice this year to ease pressure from decreasing stocks and lower inflation rate, apart from the 200,000 MT remaining import requirement for last year that remains unfilled.

Arpia said that several foreign suppliers and government-run grains agencies have already expressed interest to join the open bid if the Philippine government decides to push ahead with it.

“We continue to remain open for submission of applications [for the rice procurement]whether by government-to-government or by open bidding,” Arpia said, adding that the NFA has yet to make an official announcement for this year’s importation, including the terms of the tender.

Manila, formerly the world’s biggest rice importer, had allowed shipment into the country of a record 2.4 million MT of rice, but this was reduced to 860,000 MT in 2011. This was further trimmed down to 500,000 MT in 2012.

For 2013, Manila approved 205,700 MT of rice imports under the omnibus minimum access volume for rice, plus the 500,000 MT of rice from Vietnam. The additional volume of rice was meant to replenish the country’s buffer stock following continuous drawdown for Typhoon ‘Yolanda’ relief operations.

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  1. With the Thai government lying about an ‘inked’ G-2-G deal with China, when it turns out they had only ‘discussed it’, and mountain pressure on them to offload their 20 million tons of rice stocks because they’ve run out of money to pay the farmers who pledged this rice, it beggars believe that they have let this deadline pass. It’s a fiasco, rooted in a crack-pot scheme dreamed up by the prime minister fugitive brother who thought he could corner the rice supply and force up prices for Thailand’s benefit. Fortunately for the Philippines, Vietnam is growing plenty of cheap rice, fresh rice that hasn’t been rotting in warehouses.