Vietnam, Thailand bag deal to supply 750,000 MT rice

MANILA, Philippines - The government is awarding to Vietnam and Thailand the supply contract for 750,000 metric tons of rice buffer stock scheduled for arrival until the first quarter of 2016.

The National Food Authority (NFA) committee on government-to-government procurement (CGGP) accepted yesterday the offers from Vietnam Southern Food Corp. (Vinafood 2) and the Kingdom of Thailand for the aggregate volume at a price lower than the approved budget of $426.83 per MT.

Vietnam secured the supply for 450,000 MT of well-milled white rice at 25 percent brokens after submitting a revised offer of $246.60 MT, beating the reference price.

Thailand agreed to match Vietnam’s price offer to secure the supply contract for the balance of 300,000 MT.

The committee rejected Thailand’s initial offer of $430 per MT for 300,000 MT and Vietnam’s first offer of $431.25 per MT for 750,000 MT for being above the reference price. Offers were recast in the afternoon.

The multi-agency food security council approved the importation early this month of the volume because of the expected destructive effect of the prevailing dry spell to rice production this year until early 2016.

Scheduled for arrival in the last quarter of the year are 250,000 MT while 500,000 are expected to arrive in the first quarter of 2016.

Arrival of the 250,000 MT of rice imports is programmed in two equal tranches by the end of November and end December.

NFA Administrator Renan Dalisay earlier said while domestic rice stocks remain sufficient until the end of the year, the FSC deemed it necessary to increase domestic stocks while prices in the international market are still low and stable.

Pagasa expects the prevailing dry spell to intensify beginning October and to last until May 2016. The weather bureau said the El Niño phenomenon experienced is comparable to the 1997-1998 dry spell when a 24 percent drop in rice production was experienced.

Among the rice producing provinces expected to be hit by El Niño are Isabela, Mindoro, Quezon, Albay, Aklan, Antique, Iloilo, South Cotabato, Sultan Kudarat and Zamboanga.