Listed AgriNurture, Inc. (ANI) has signed an exclusive deal with Vietnam Southern Food Corporation – VINAFOOD II, to import two million metric tons of rice to the Philippines starting this year valued close to US$1-billion.
In a Memorandum of Agreement signed by ANI President and CEO Antonio Tiu and VINAFOOD General Director Nguyen Ngoc Nam over the weekend, Vietnam’s largest grains exporter agreed to exclusively supply long grain rice to ANI to help address supply issues in the Philippines. VINAFOOD II is a state-owned corporation duly designated and assigned by the government of Vietnam to export rice and help achieve food security in Southeast Asia.
In a disclosure to the Philippine Stock Exchange (PSE), ANI said the terms and conditions of the exclusive supply agreement shall be finalized in accordance with applicable Philippine laws including, but not limited to, the proposed rice tarrification bill.
It will be recalled that last month, ANI disclosed that the National Food Authority (NFA) has granted ‘original proponent status’ to its unsolicited joint venture proposal for the financing and purchase of imported rice to help augment the country’s buffer stock.
ANI told the local bourse in August that it received a letter from NFA acknowledging receipt of its proposal and that the company has been considered and recognized as original proponent.
Under the proposed JV agreement, the ANI consortium shall finance the supply of NFA rice with no cash out on the part of government. Both parties shall jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports. NFA, on the other hand, will solely determine the type of commodity to be imported, specifications and quantity.
As accepted by NFA, the ANI consortium will import as much as 500,000 metric tons of rice, equivalent to two (2) weeks national inventory of subsidized NFA rice per quarter. Since NFA will not release a single peso for said purchases, the agency can use its budget to buy more palay from local farmers or import more rice as needed, the company said.
Under its mandate, NFA is required to ensure national food security and to stabilize supply and prices of staple cereals like rice both in the farm and consumer levels. At any given time, the agency is required to maintain a rice buffer stock good for 15 days, and good for 30 days during lean months.
The Philippine daily rice requirement is estimated at 32,750 metric tons, thus, ANI’s 500,000 metric ton importation is just enough to fill NFA’s 15-day requirement. During lean months, the NFA needs to import more to match the mandate of President Duterte to maintain 60 days inventory.