Vietnam wins PH tender for 150,000 MT of rice

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MANILA failed to secure its entry rice stock requirement for the lean season after Friday’s government-to-government tender was undersubscribed.

Joseph dela Cruz, chairman of the National Food Authority’s (NFA) Committee on G2G Procurement and deputy administrator for Marketing Operations, said they are set to award to Vietnam the supply of 150,000 metric tons of rice following Friday’s G2G bidding.

Dela Cruz said they will recommend the results of the G2G offers for the final approval of NFA administrator Renan Dalisay, adding that they expect to complete the issuance of the notice of award no later than Wednesday next week.

The volume, however, was massively short of the 250,000 MT rice procurement target set by the NFA.


“The remaining balance of 100,000 MT, which was not taken, will be discussed by the [NFA] management and we will submit a recommendation to the NFA Council if we shall pursue another round of bidding,” the official said.

“It will be the NFA Council who will decide whether it will conduct another G2G or an open [international]bidding for the remaining volume,” he added.

A G2G transaction requires an existing executive agreement for a country to participate in the bidding for rice supply. At present, only three countries—Vietnam, Thailand and Cambodia—have existing rice purchase agreements with Manila.

An open tender, on the other hand, would allow as many foreign private entities outside the Philippines’ current bilateral agreements to bid for the supply of Manila’s rice requirement.

On Friday, the state-run NFA rejected initial offers from Thailand and Vietnam, which were both above the government’s price ceiling of $410.12 per MT of well-milled long grain white rice at 25 percent brokens.

Thailand offered $419 per MT for 100,000 MT, while Vietnam offered $419.35 per MT for 250,000 MT.

During the second round, Vietnam offered to supply a lower volume of 150,000 MT of rice and match the approved budget for the contract of $410.12 per MT; while Thailand did not make an offer.

Malou de Leon, marketing officer for the Royal Thai Embassy Manila, said that it was an executive decision by the Thailand Government not to do a reoffer.

“We have the rice stocks. It’s the just the decision of the Thai government not to join,” de Leon told reporters.

According to observers, the low reference price set by the Philippine Government was to blame for the lackluster results of the G2G tender, which was evident in Vietnam’s lower offered volume and Thailand’s decision to back out.

Dela Cruz, however, said that Manila’s computation for the reference price was based on the latest prevailing price in the international market as of Thursday.

“We cannot say that it is too low. If it’s low, Vietnam should have similarly retracted. If it’s not reasonable or if they will not make money, they should not have dropped a second tender,” he said.

Manila is importing rice through G2G to meet the stock requirement before the start of the lean season in July.

The state-run grains agency is required by law to have at least a 15-day buffer stock at any given time and a 30-day buffer stock during lean months. Traditionally, lean season in the Philippines starts in June and ends in September.

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