Philippines plans to tap regional rice reserve
Offers short of the required 550,000 tons
Philippine Daily Inquirer
First Posted 01:05:00 03/12/2008
Filed Under: Food, Agriculture, rice problem
The Philippines might tap an emergency regional rice reserve after it attracted only 335,500 tons at an auction Tuesday, less than two-thirds of the volume asked for and at significantly higher prices, a senior government official said.
Being considering is a request for supplies from the East Asia Emergency Rice Reserve, a stockpile obtained from Southeast Asian countries as well as China, Japan and South Korea, said Ludovico Jarina, deputy administrator of the National Food Authority
“We have already communicated to the East Asian partners,” Jarina told reporters.
She added that any rice from the reserve would be bought at spot market prices or via bidding.
The Philippines, one of the world's biggest rice importers, is having trouble securing enough of its national staple to meet this year's import requirement of up to 1.8 million tons because of soaring prices and tight world supply.
At Tuesday’s auction, prices ranged from $618.50 to $745 a ton, including freight cost, a big jump from the last rice auction, held in January, when the average price was $474.41 per ton.
The government was aiming to secure 550,000 tons of rice Tuesday for delivery between March and May. It had failed at two previous auctions to secure the full rice volume because of rising prices.
Last month, President Gloria Macapagal-Arroyo went outside normal commercial channels to ask Vietnamese Prime Minister Nguyen Tan Dung to guarantee a supply of up to 1.5 million tons of rice.
But Hanoi said it could ensure a shipment of only one million tons, including around 700,000 tons that Vietnamese traders had already agreed to supply after auctions in January and December.
There were 10 bidders Tuesday. About 130,500 tons was offered from Thailand, 30,000 from Vietnam, 10,000 from Pakistan and 165,000 tons from these three countries together plus China.
The government had asked for bids for 450,000 tons of 25 percent broken rice, 50,000 tons of 15 percent broken rice and another 50,000 tons of 5 percent broken rice.
Jarina said bids would be awarded in five days.
So far, the government has ordered 876,700 tons of rice, largely from Vietnamese suppliers.
The government plans to tap a $60-million export credit guarantee from the United States to fund its rice purchases. It is looking at commodity loans from other countries, Jarina said.
Despite efforts to boost production, Philippine rice harvests have failed to keep pace with demand.
Agriculture Secretary Arthur Yap said Tuesday the National Food Authority had been given authority to import as much as 2.1 million tons of rice, up from the original plan of 1.8 tons. With a report from Reuters; edited by INQUIRER.net
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