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Thursday, November 05, 2009 | MANILA, PHILIPPINES
Economy
SoKor, Viet firms give lowest bids in auction for 2010 rice
THE PHILIPPINES will likely buy 250,000 metric tons (MT) of rice from two traders that will source the commodity from Vietnam and/or Thailand, results of the country’s first open tender for 2010 supplies showed.
The Philippines, the world’s largest rice importer, has moved early to secure 2010 supplies after successive storms hit farmlands in September and October and destroyed one million tons of palay.
An official of the National Food Authority (NFA) described the prices offered to be "quite good," but another tender this year has yet to be determined.
Traders said the government should conduct more open auctions this year to take advantage of the good prices offered.
Another tender will likely boost prices at a time when other importers like Iraq and India are also buying grain overseas.
Korean trading firm Daewoo International Corp. gave the lowest bid of $468.50/MT, including cost and freight, to supply 100,000 tons of 25% broken white rice, for arrival between January and April. Daewoo said it will source the grain from Thailand and/or Vietnam.
Vinafood 2 gave the second-lowest bid of $480/MT, C&F, for 150,000 tons of the same rice grade for arrival in January, which traders say could open the window for another government-to-government deal between Manila and Hanoi.
Vietnam’s 25% grade was quoted yesterday at $400/MT, free on board basis, while Thailand’s was at $530/MT.
The formal awarding of contracts is scheduled within five working days, or early next week.
The country’s second open tender this year, following the purchase of 75,000 MT in July, attracted 10 international traders, of which six were qualified.
The country also received offers ranging from $534.99/MT-$570/MT from Hamburg-based Toepfer International Asia Pte, Ltd.; LG International Corp.; Thai Hua Co., Ltd.; and Asia Golden Rice Co., Ltd.
NFA had set a budget of P6.366 billion, or around $536/MT, cost and freight, at current exchange rates, for the tender.
"The price is quite good and we hope the market will remain that price," Ludovico J. Jarina, deputy administrator of the NFA and the chairman of the Bids and Awards Committee, told reporters yesterday at the sidelines of the auction in Quezon City.
"We may conduct another bidding, depending on the results of the assessment to be made by the [government’s] Inter-Agency [Committee on Rice and Corn]. It should be out within this month, so we can determine if we will go on with the bidding or other modes we are going to adapt," he added.
Traders present in yesterday’s auction said the government should take advantage of current low prices by staging another tender soon.
"The government should rush because we can see that offer price will increase to above $500/MT. If they do not hold an open tender soon, they will miss the opportunity for good prices," a trader said in an interview at the sidelines of the open tender.
"We see uptrend in prices at the end of the year," he said, adding that it could reach $600/MT.
Shahzad F. Naqi, chief executive of Pakistani rice trader Peak Holdings, Ltd., concurred, saying in a separate interview: "The Philippines needs an excess of two million MT next year. To cover that amount, there has to be more tenders this year."
Late last year, the country bought 1.5 million MT of rice from Vietnam worth $824.25 million under a government-to-government deal.
The country opted for the government negotiations in order to prevent prices from increasing near the record-high $1,080/MT in April last year from $350-$400/MT in December 2007.
The Philippines has so far imported 1.775 million MT this year, down from the record 2.3 million MT imported last year.
Rice stocks of the country stood at 2.405 million MT, which is sufficient for 68 days of national consumption, as of Oct. 27, data from the NFA show. The volume is 8.77% higher than last year’s 2.211 million MT. -- Neil Jerome C. Morales and Reuters
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