AgriNurture to buy rice from Vietnam state firm in $1-B deal

Listed agribusiness company AgriNurture Inc. (Ani) has signed a billion-dollar agreement with Vietnam’s largest grains exporter to help augment the country’s rice stocks amid skyrocketing prices.

Ani president and CEO Antonio Tiu and Vietnam Southern Food Corporation (Vinafood II) general director Nguyen Ngoc Nam signed an exclusive $1 billion-deal over the weekend, enabling Ani to import as much as 2 million metric tons (MT) of rice from the latter every year.

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,” Ani said in a statement.

The agreement is in line with Ani’s unsolicited proposal to the National Food Authority (NFA) last month, offering to buy imported rice on behalf of the agency and augment stocks.

President Duterte has included the Rice Tariffication Bill as one of the administration’s priority bills. Once passed, this would allow members of the private sector to freely import rice so long as they pay the right taxes.

The President has also ordered the NFA to maintain a 60-day buffer stock during lean months. Agriculture Secretary Emmanuel Piñol earlier said this could be done with the help of the private sector, noting that the government does not have enough funds to finance and maintain a huge inventory on its own.

Ani’s plan is to import about 500,000 MT of rice every quarter, to be sold as NFA rice priced at P27 and P32 a kilogram depending on the quality. With the country’s daily rice requirement at 32,000 MT, this is equivalent to two weeks’ worth of stocks.

Terms and conditions of the agreement have yet to be finalized.

“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.

NFA has been embroiled in controversies after its administrator Jason Aquino allegedly diverted funds to pay for the agency’s maturing loans. Under the General Appropriations Act, the fund should be used to stabilize the price and supply of grains.

The lack of affordable rice has caused prices in the market to spike. As of the fourth week of August, prices have reached new highs at an average of P43.86 and P47.12 a kilo for regular milled and well-milled rice, respectively.