The National Food Authority on Thursday announced that it would award Vietnam the contract for the delivery of 500,000 metric tons of rice to top up the country’s buffer stock.
At $462.25 a ton, the government-to-government contract rings up at about $231.1 million, or some P10 billion in current rates.
The numbers are “free on warehouse” prices, meaning that costs related to spillage, damage and cargo handling have already been covered.
NFA director Rex C. Estoperez said in an interview that Hanoi is working out the delivery of an initial cargo of 120,000 MT to 150,000 MT by December.
In terms of 50-kilogram sacks, the volume ranges between 2.4 million and 3 million sacks.
Estoperez said that the remainder of the order is expected to arrive “early next year.”
Earlier this week, when a call for tender was announced, Estoperez said the NFA wanted the entire order delivered by February—well before the harvest of the summer crop.
If the imported rice were to arrive later, the influx of supply would affect the prices of home-grown rice.
For this bidding, Thailand offered $475 per MT. Cambodia, which is also qualified to make a bid, did not participate.
The NFA Council earlier this month decided to import rice when the safety stock fell to some 12 days’ worth of supply—less than the mandated 15 days.
With a national consumption rate of 34,000 MT a day, the contract volume is good for about 15 days.
The country’s rice producing regions have been badly hit by a series of typhoons, as well as the southwest monsoon, in recent months.
Supertyphoon “Yolanda” alone destroyed at least P1.2 billion worth of palay in farms, according to the Department of Agriculture. On top of that, Yolanda put a strain on the NFA’s inventory as it released stocks to victims in devastated areas.