ASEAN KEY DESTINATIONS
Philippines to buy less rice than planned on weaker El Nino effect
THE PHILIPPINES, one of the world’s biggest rice importers, plans to buy less rice than initially estimated next month as the impact of the El Nino weather phenomenon has not been as severe as expected.
The country expects to seal a supply deal in January for second quarter delivery to ensure adequate supply amid worries of drier weather in the first quarter, National Food Authority (NFA) Administrator Renan Dalisay told reporters yesterday, adding he is aware of recommendations to buy up to 400,000 tonnes. The NFA is the Philippines’ grains procurement agency.
Additional rice import requirements were lower than the initial estimate of 1.3 million tonnes because El Nino crop losses turned out much smaller than expected, said Dalisay.
The current El Nino episode, which is already causing drought and other extreme weather affecting millions of people across parts of the world, could emerge as one of the strongest on record, according to experts.
“We projected a 24 per cent drop in harvest this year, but it did not happen,” Dalisay said. He added harvests in the first nine months of the year were higher and recent typhoons brought in rains that helped farmers replant.
Still, the additional demand, although smaller, could bring relief to rice exporters in Vietnam and Thailand, the Philippines’ main suppliers.
Asian rice export prices were stable in recent days as high prices in Vietnam and ample stocks in Thailand kept buyers at bay.
The final January volume depends on the recommendation of the country’s food security panel, which is looking at between 300,000 and 400,000 tonnes for delivery in the second quarter. Final approval will be made by the NFA Council, a group of the country’s top economic managers.
“It will be finalised within the year and contracted in January,” Dalisay said.
The additional supply could be covered by a deal between the NFA and the governments of either Vietnam, Thailand or Cambodia, Dalisay said. Another option is to allow private traders to ship in the approved volume.
That will be on top of the 500,000 tonnes that the NFA has already bought from Vietnam and Thailand, to be delivered within the first quarter of 2016.
Private traders could bring in up to 805,200 tonnes next year subject to a tariff of 35 per cent, Dalisay added. Rice imports of the NFA is tariff free.
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