PHL to buy 1 million tons of rice as prices drop -- economic exec

19.08.2016

The Philippines, one of the world’s top rice buyers, plans to import 1 million tons of the grain to secure supply of the country’s food staple through next year while prices are low, Economic Planning Secretary Ernesto M. Pernia said on Thursday.

The immediate volume to be purchased will be the 250,000 tons that the government announced on Aug. 9, followed by another tranche of 250,000 tons, he said.

“And the next set will be about 500,000 tons to be really secure about rice (supply) over the next year,” Pernia told a media briefing.

The 750,000 tons will be purchased via government-to-government deals while the remaining 250,000 tons will be imported by private companies, he said.

In the government-to-government transactions, the Philippines usually buys rice from either Vietnam, Thailand or Cambodia.

Manila’s plan could support global rice prices that have dropped amid lean demand from the rest of Asia and Africa, with benchmark prices in major suppliers Vietnam and Thailand at multi-month lows.

At $410 a ton on Thursday, Thai 5% broken rice RI-THBKN5-P1 has fallen 7.5% from a nearly three-year high reached on July 22.

“I think our rice on stock will be sufficient for the rest of the year but then we need to import right now to prepare for the deficiency,” Pernia said.

“Otherwise we will experience what happened in 2013 when rice prices spiked.”

Frequent typhoons usually hit the country’s rice production, forcing it to import any shortfall to feed its 100 million people.

The planned rice purchase, if carried out, will be smaller than the Philippines’ imported volume of around 1.8 million tons for 2015.

President Rodrigo R. Duterte, who assumed office on June 30, has vowed to make the Philippines self sufficient in rice within his six-year term.

The Philippines expects its paddy rice output to reach 18.135 million tons this year, flat from 2015 and reflecting crop losses in the first half of the year due to El Nino-induced drought.


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