RP sets more rice auctions for private sector

ABS-CBN News

Posted at Jun 03 2008 11:27 AM | Updated as of Jun 03 2008 07:27 PM


Reuters


MANILA - The Philippines' state grain agency said on Monday it would hold auctions for private traders to import up to 200,000 tons of rice on June 11, 20 and 27.

Conrad Ibañez, assistant administrator of the National Food Authority (NFA), said any volume out of the 200,000 tons that was not taken up in the June 11 auction would be offered in succeeding auction dates.

The Philippine private sector has largely shunned previous opportunities to import the national staple duty-free due to record-high international prices and difficulty competing locally with government-subsidized supplies of the grain.
 
But with overseas prices dropping from peaks ahead of an expected increase in world supply and the government holding off importing after a buying spree earlier this year, some market observers said demand would pick-up among the private sector.

"International rice prices may soften a bit because Thailand is approaching its rice harvest and demand eased after the NFA stopped importing rice," said Robert Hernandez, a private trader.

"So, I expect many private sector people will participate in the auctions because rice prices continue to climb locally, partly due to problems in rice delivery," he said.

In two auctions last month, only 22,060 tons were taken up by the private sector out of 163,000 tons up for grabs.

Unlike last month's auctions, the NFA will not specify what countries the rice will be sourced from at the auctions in June.

Stung by a near tripling of international prices this year, the Philippine government, the world's largest rice importer, is trying to encourage private sector purchases of rice to help boost national supplies.

The government has resorted to persuading neighboring rice producing nations to sell the grain in government-to-government deals and had scrapped a tender to buy 675,000 tons of rice last month, saying it wanted to wait until international prices dropped.

The rice to be imported by the private sector needs to arrive by end-August at the latest, NFA's Ibañez said.

The rice imports are to be priced at a maximum $1,200 per tonne, including cost and freight, the NFA said in a notice published in local newspapers.

Each private sector participant can import a minimum 25 tons to a maximum 5,000 tons as long as they pay a service fee of at least 2 pesos per kilogram of rice.

The NFA will hold pre-auction conferences four days before the scheduled auction dates this month.