Only four companies were able to qualify in the National Food Authority’s (NFA) bidding process yesterday for the purchase of 250,000 metric tons (MT) of rice as most companies were not able to meet the agency’s reference price.
Traders who talked to the Inquirer after the bidding said they found the floor price of $428.18 a ton set by the grains agency “too low.” Hence, the disqualification of most bidders.
Prices offered by most companies ranged between $450 and $480 a ton. Of the 14 companies that participated, only four were able to meet the reference price.
While the NFA did not consider Thursday’s bidding as a failure, its deputy administrator for marketing operations, Judy Carol Dansal, said they had to rebid the remaining volume immediately.
Of the 250,000 MT of rice, only 47,000 MT were bid out. Companies that passed the bidding included Thai Capital Crops Co. Ltd., Vietnam Southern Food Corp. (Vinafood) I and II, and Khiem Thanh Agricultural High Technology Joint Stock Co.
The rice to be imported were divided into nine lots. Of those, Thai Capital offered $426.23 a ton for the purchase of 18,000 MT of rice for Lot 3 while Vinafood II offered $427 a ton for the purchase of 14,000 MT of rice for Lot 4.
The government has yet to decide on who will win the shipments for Lot 5 between Vinafood I and Khiem Thanh, which offered $427.50 and $428 a ton, respectively, for the purchase of 14,000 tons of rice.
The remaining 203,000 MT of rice will have to be rebid, although the NFA has yet to decide when.
Asked whether the agency would consider raising its reference price to accommodate more players, Dansal said this would be up to the NFA Council. Earlier this year, NFA adjusted its floor price after a failed bidding.
The current volume is part of the government’s additional rice imports under the NFA. It has already purchased 500,000 MT of the staple during the first semester, while an additional 750,000 tons of rice are expected to arrive before the year ends.
Retail prices of rice have been on an uptrend since the start of the year. As of last month, prices of the staple continued to increase despite the slight reduction in wholesale prices in the last three weeks of September, thus leading to the further acceleration of the inflation rate.
Based on the end-September data of the Philippine Statistics Authority, wholesale rice prices started to decline in the latter part of September, but the reduction has not yet been reflected in the retail market.
The average wholesale price of regular-milled and well-milled rice declined by 11 centavos and 25 centavos a kilo, respectively, from early September. However, retail prices still rose by 29 centavos and 23 centavos, respectively.
Compared to last year, average retail prices of both varieties increased by P7 and P8.03 a kilo, respectively.
PSA data showed that rice was the No. 1 contributor to inflation in September 2018, while food items in the consumption basket accounted for more than half of the inflation rate in the same month.