Wednesday, 14 October 2009

Manila speeds up rice purchases

by Luzi Ann Javier
Manila Standard

THE Philippines, the world’s biggest rice importer, brought forward planned purchases after storms hurt local crops and global stockpiles were forecast to decline, highlighting potential tightness in worldwide supplies.

The National Food Authority yesterday issued an invitation to suppliers for 250,000 metric tons at an Oct. 30 tender, according to a notice on its Web site. That was the earliest date the agency had set to fill next year’s requirements, about two months ahead of usual practice, spokesman Rex Estoperez said.

The Philippines’ decision may help to drive rice prices higher, curbing a 12-percent decline in Chicago this year. Rice imports by the Philippines last year, coupled with export curbs by some suppliers, helped to send the contract to a record and sparked concern that there may be a global food crisis.

The early tender “sends a strong signal to the market,” said Safder Hussain Mehkri, a member of the Rice Exporters’ Association of Pakistan.

Pakistani shippers would make offers for the order, said Mehkri, vice chairman of the South Group, which accounts for about 95 percent of the nation’s exports.

Rice futures, which gained 0.8 percent to $13.505 per 100 pounds Monday, surged to a record $25.07 on the Chicago Board of Trade in April 2008 as India and Vietnam held back shipments. Rice is the staple food for billions in Asia and Africa.

“It makes sense to do this expeditiously given the forecast contraction in the global grains markets,” said Gary Olivar, deputy spokesman for Philippine President Gloria Arroyo, referring to the tender.

“Any contraction in supply will of course push global prices higher,” Olivar said yesterday by telephone.

Peter McGuire, managing director at CWA Global Markets Pty, said on Oct. 8 that so-called rice riots might reappear next year as prices surged on lower output in India and increased imports.

Protests over high food prices swept the world last year from Haiti to Bangladesh.

The Philippines, which yesterday raised its estimate for damage from the storms to 8.6 percent of fourth-quarter rice output, might boost overseas rice purchases by 13 percent to 2 million tons in 2010, National Food Authority Assistant Administrator Jose Cordero said on Oct. 9.

Tropical storm Ondoy struck the Philippines’ largest rice-growing region on Sept. 26, causing the heaviest rainfall in more than four decades around Manila and surrounding provinces.

Typhoon Pepeng hit parts of Luzon on Oct. 3, including Nueva Ecija, the largest rice-producing province, and Ilocos Sur, Ilocos Norte, La Union, Pangasinan, and Cagayan. Bloomberg

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