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Vietnam firms bag PH rice import contracts

/ 03:45 AM May 01, 2014

MANILA, Philippines—The National Food Authority (NFA) expects to beef up its dwindling buffer stock with the award of contracts to Vietnamese suppliers for 800,000 metric tons (MT) that will arrive in tranches starting this month.

Vietnam Northern Food Corp. (Vinafood I) and Vietnam Southern Food Corp. (Vinafood II) offered the lowest prices during an open bidding held last April 15.

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Vinafood II is committed to deliver a total of 600,000 tons of white rice, well-milled with 15-percent broken grains.

The state firm offered prices in three lots of 200,000 tons each at $436.50, $437.75 and $439.25 a ton, respectively.

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Vinafood I, also a state-owned firm, offered prices for two batches of 100,000 tons each at $436 and $439 a ton, respectively.

“The supplies to be imported from Vietnam will form part of the government buffer stock for the lean months of July to September,” NFA Administrator Orlan A. Calayag said in a statement.

“It will also serve as contingency stocks during natural or man-made calamities,” Calayag added.

He said that the NFA was able to save on its budget because all the prices offered were lower than the approved $477.28 a ton.

Earlier this month, the Philippine Statistics Authority (PSA) reported that the NFA’s inventory was unchanged after a month of consumption at 460,000 metric tons as of March 1.

As of that date, the national stock was at a five-month low of 1.78 million MT. The PSA said the inventory was good for 53 days’ consumption, which was six days less than in the beginning of February.

Of the total stock, the NFA was holding about 26 percent that was good for 14 days. This was less than the 15 days’ worth of supply that the NFA is mandated to maintain as a buffer stock.

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Based on the government’s measure of rice self-sufficiency, supply must exceed yearly demand by 90 days’ worth of buffer stock.

The newly contracted supplies are expected to have been delivered by August.

Calayag said that under the cost insurance in freight-deliver duty unpaid (CIF-DDU) terms, rice will be delivered “door to door” to NFA-designated warehouses.

“This will be advantageous for the government because only those received and accepted at designated warehouses will be paid,” he said. “NFA will not pay for losses incurred for shortlanded cargoes (volume lost during transit), including bad order cargoes.”—Ronnel W. Domingo

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TAGS: Business, food, Philippines, rice import contracts, rice imports, Vietnam, Vinafood
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