Rice Imports Advanced by Philippines After Storms (Update2)

Rice Imports Advanced by Philippines After Storms (Update2)

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Oct. 12 (Bloomberg) -- 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 today issued an invitation to suppliers for 250,000 metric tons at an Oct. 30 tender, according to a notice on its Web site. That’s the earliest date the agency has set to fill next-year requirements, about two months ahead of usual practice, spokesman Rex Estoperez said.
The Philippine 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 today, 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.
‘Makes Sense’
“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 today by phone.
Peter McGuire, managing director at CWA Global Markets Pty, said on Oct. 8 that so-called rice riots may reappear next year as prices surge 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 today raised its estimate for damage from the storms to 8.6 percent of fourth-quarter rice output, may 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 Ketsana 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 Parma 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.
Declining Stockpiles
Worldwide rice stockpiles may drop 3 percent to 117.4 million tons next year as delays in the onset of rains in parts of Asia curb production in 2009, according to a forecast from the United Nations’ Food and Agriculture Organization. The prediction was issued on Sept. 25, before the Philippine storms.
Rice output in India, the world’s second-largest producer and consumer, may fall 18 percent to 81 million tons in the marketing year that began Oct. 1 after drought parched crops, Concepcion Calpe, senior economist at the FAO, said last week.
The forecast decline may help to push the stockpiles held by the world’s five largest exporters down to 20 million tons at the end of the marketing year on Sept. 30 from 30 million tons a year earlier, Calpe said.
The Philippines will seek the supplies from the Oct. 30 tender from Thailand, Vietnam, China, Pakistan, Australia, the U.S. and India for delivery between January and April, the authority said. Thailand is the world’s biggest rice exporter followed by Vietnam.
Without typhoons devastating crops, the Philippines typically has a shortfall equal to about 10 percent of annual rice demand, which is estimated at 12.9 million tons this year, according to Estoperez from the National Food Authority.