THE government might seek to buy an additional 1 million metric tons of rice before the year ends, taking its total purchase for next year to a record and raising world prices for the commodity.
The country could issue a tender on Dec. 15 and another one a week later, said a National Food Authority official who spoke on condition of anonymity.
The government is trying to fill a larger-than-usual shortfall after 1.3 million tons was lost in recent storms.
The purchases may drive prices of the staple higher. India is seeking shipments from Thailand and Vietnam after drought in the world’s second-most populous nation ravaged crops.
“These tenders will surely send up rice prices on the international market as it is a relatively large volume in a short period of time,” said Cao Thi Ngoc Hoa, deputy chief executive at Vietnam Southern Food Corp. The company, known as Vinafood 2, is the country’s biggest exporter.
The Philippines has already tendered for 1.45 million tons for next year. The additional tenders for 1 million tons would take planned 2010 imports to 2.45 million tons, with orders set over the seven weeks through Dec. 22. That’s equal to 8.3 percent of the estimated global trade.
India, the world’s second-largest grower and consumer, was seeking as much as 2 million tons, Thailand’s Prime Minister Abhisit Vejjajiva said. The global rice trade will total 29.5 million tons next year, according to an estimate from the US Department of Agriculture.
The benchmark export price of rice from Thailand, the world’s biggest shipper, has risen 6.9 percent from this year’s low of $525 a ton on Oct. 28. The price, announced weekly by the Thai Rice Exporters Association, was set Thursday at $561 a ton. It reached a record $1,038 a ton in May 2008.
The Philippine government panel reviewing the imports might have already authorized the purchase of an additional 600,000 tons, Jose Cordero, assistant administrator of the National Food Authority, said in a separate interview.
The Philippines imported a record 2.4 million tons in 2008, when global prices surged. The additional purchases would depend on the country paying an average of no more than $500 a ton in two tenders for 600,000 tons each on Dec. 1 and Dec. 8, the official said.
The National Food Authority purchased 250,000 tons of rice last month in the first tender for 2010 supplies. It bought 100,000 tons from Daewoo International for $468.50 a ton and 150,000 tons from Vinafood 2 at $480 a ton.
The country wanted to secure supplies ahead of everybody else, said WFA director Romeo Jimenez.
“Vietnamese companies, including us, have prepared to join” the new tenders, Vinafood’s Hoa said by phone from Ho Chi Minh City.
India lost 18 percent of its crop to drought. The South Asian nation might import as much as 3 million tons next year, turning it into a net importer for the first time in 21 years, said Samarendu Mohanty, senior economist at the International Rice Research Institute.
“Prices will remain firm, with India making loud noises about its intention to import rice,” Vijay Arora, president of the All India Rice Exporters Association, said in a phone interview from New Delhi. “India may import rice more as a precautionary measure than its actual requirement.” Bloomberg
