NFA accepts offer of PITC to supply rice

The National Food Authority revealed yesterday that it has accepted the offer of the Philippine International Trading Corp. (PITC) to supply around 41,000 metric tons of rice as part of the government's commitment under the GATT Uruguay Round to import under the minimum access volume (MAV) system 131,000 metric tons of rice this year.

NFA earlier awarded to international company Louis Dreyfuss the contract to supply 25,000 metric tons of imported rice and to Vina Foods of Vietnam another 65,000 metric tons.

Government is importing at least 300,000 metric tons of rice this year of which 59,000 metric tons have already arrived from the United States and was secured under the latter's Public Law 480 commodity loan program. While the PL 480 loan was secured by the Department of Agriculture, the NFA was tasked to monetize the loan.

Another 100,000 metric tons will be imported from Thailand under a countertrade agreement. NFA officials, however, said there is still no consensus as to what Philippine product to trade and at what value.

NFA deputy administrator Gregorio Tan, however, said the import volumes may still increase depending on the results of the April palay production survey. The April survey will reveal how much palay was actually harvested from January to March, how much will be harvested during the second quarter depending on standing crop, and farmers' intention to plant for the third quarter.

With a cleared idea as to how much palay will be produced during the first half of the year, government planners will be able to determine the stock position by July 1 which is the beginning of the three-month lean rice supply season. Ideally, the country needs rice stocks good for 90 days by July 1 to tide it over the lean months.

Meanwhile, the NFA has started disposing off on a forward selling basis to local buyers 25,000 metric tons out of a total of 100,000 metric tons out of raw sugar otherwise intended for the world market.

President Estrada earlier ordered the NFA to export 100,000 metric tons of raw sugar between February and March of this year to ease a local supply glut and prop up depressed domestic sugar price.

The President also directed the importation by June of this year of a similar volume of refined sugar to replenish what was supposed to be taken out of the local market in time for the lean sugar supply month of July to September.

However, the NFA failed to attract prospective exporters and importers. The first tranche of 25,000 metric tons was bid out twice, and in both occasions, the NFA declared a failure of bidding. Late last week, the agency bid out for the second time the second tranche of 30,000 metric tons, but it was also declared a failure.

The NFA has decided not to bid out the remaining third and fourth tranches covering the balance of the 100,000 metric tons.

Tan explained the bids that the prospective exporters were offering were just too low and those offered by the suppliers, too high.

He said that technically, the NFA can already enter into a negotiated contract for both the first and second tranches, but he doubts whether the agency can get a good price at this time. "Right now, local prices are down and we do not know up to when this will continue," he said.

But Tan confirmed that the NFA has already sold on a forward basis (for delivery in June or July) 400,000 50-kilo bags of raw sugar or around 25,000 metric tons to local buyers. He said similar contracts may be entered into for the remainder of the 100,000 tons.