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200,000-ton rice deal inked with Vietnam
The Philippines has sealed a deal to import 200,000 tons of rice from Vietnam, the world’s second-largest exporter of the grain, at above market prices but below a government-set budget, the National Food Authority said on Mar. 24.
Manila, seeking to bring in this year’s rice imports before the lean harvest season starts in July, is also in talks for a similar deal with Thailand, the world’s top exporter.
Thailand’s share in the Philippines’ rice imports has been on a decline since Manila forged a deal with Vietnam in 2008.
"We feel very strongly that we had a very good price for the 200,000 tons," NFA administrator Angelito Banayo said.
"The Philippines got the best deal compared with other countries in the Southeast Asian region," he said.
The deal with Vietnam was priced at $480 a metric ton, below a budget of $550 per ton, cost and freight, earlier set by the government for the volume.
But the price, translating to $440-$450 a ton on free-on-board basis, is above current levels in Vietnam.
On Wednesday, offers for the 25 percent broken rice, often bought by the Philippines, rose to $410-$415 a ton, free-on-board Saigon port, before the news on the government deal, from $400-$405 a ton a week ago.
Vietnamese rice prices are expected to rise further in coming weeks after the Philippines announced the deal, traders said.
"Now is the peak time of the harvest but prices have been standing still, so with this demand prices will rise," a trader at a foreign company in Ho Chi Minh City said. "Production costs are rising in Vietnam so farmers will look for every opportunity to raise prices," he said.
Anticipating the price rise, the Vietnam Food Association has decided to raise by 2.2 percent the minimum export price for the 25 percent broken grade to $470 a ton, free-on-board, effective March 24.
Manila’s existing rice supply agreement with Vietnam covers an annual supply of up to 1.5 million tons. The deal was extended to 2013.
Banayo said the Philippines, the world’s biggest rice buyer before huge import cuts planned for this year, was in discussions with Thailand and Cambodia for a similar supply deal.
He said the talks with Thailand involve 1 million tons of annual rice supply for three years.
But Banayo said the government was unlikely to import more than the 1.3 million ton ceiling set for this year. Manila has decided to cut purchases to 860,000 tons this year from record imports of 2.45 million tons in 2010.
vietnamnews, Reuters
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