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May 17, 2008

Rice prices drop amid Japan offer, bumper crops

The Philippines, one of the world's largest rice importers, said Friday prices are softening after Japan offered to sell rice to Manila amid news of bumper world harvests for 2008, reported AFP.

Large tenders by the Philippines to fill its expected 2008 production gap of up to 2.7 million tonnes have helped drive up prices by 76 percent between December 2007 and April 2008, according to the UN Food and Agriculture Organisation.

However, the government's grain procurement arm, the National Food Authority (NFA), has seen prices in the international market ease, NFA spokesman Tom Escarez told AFP.

"Prices spike every time we have a large tender. The market became quiet after the tender for 675,000 tonnes failed and the market realised we were not in a hurry," he added.

A letter from Tokyo informing Manila that between 40,000 and 60,000 tonnes of Japanese rice is available also apparently helped calm the market, Escarez said.

The official said the two governments are currently negotiating the manner by which the supply will be procured, which he said would most probably be in the form of a soft loan or a negotiated supply contract.

The Philippines also expects some supplies to be offered from Pakistan when the NFA holds its next tender for about 200,000 tonnes early next month, he said.

Press reports this week have said Pakistan, the world's fifth largest rice exporter, was expected to allow exports of up to a million tonnes since local requirements have been met.

"The market price for rice has softened by about three percent," Escarez said.

Some reports have said that the market price over the past week has fallen by around 14 percent.

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