THE PHILIPPINES, the world’s largest rice importer, received slightly higher price offers from traders in the tender yesterday for 600,000 metric tons (MT) of rice -- the last of four advanced auctions for 2010 stocks.
The National Food Authority (NFA) bought 250,000 MT in the first advanced tender held last Nov. 4. The state grain agency said it will buy 509,950 MT out of the 600,000 MT target in the Dec. 1 auction due to higher-than-expected price offers. A government source said yesterday the agency may buy at least 474,000 MT from the tender last Dec. 8.
That would bring the country’s 2010 imports to just over 1.83 million MT, if it makes a full 600,000 MT award for the tender yesterday. This total, in turn, will be less than the 2.05 million MT the NFA had hoped to buy in advance to augment 2010 stocks after storms hit crops at the start of this quarter.
In yesterday’s auction, five traders offered to sell 25% broken long grain white rice at $664.90-$767.88/MT, cost and freight, higher than the $618.95-$768.50/MT offered during the Dec. 8 tender.
Given a higher budget and a smaller price increase, NFA Spokesman Rex C. Estoperez said the agency might award the entire 600,000 MT it sought, to be delivered March-June next year.
A trader said he was expecting the slight rise in prices as the Philippines held its last of three tender this month for the same volume.
"I think there was some improvement in the prices," NFA Deputy Administrator Ludovico J. Jarina told reporters. "Other prices are high, but others are within our range."
At the tender, Vinafood 2, Vietnam’s top rice exporter, submitted the lowest bid at $664.90/MT, C&F, for 600,000 MT. South Korean trading firm Daewoo International Corp. submitted the second lowest bid at $717/MT for 100,000 MT, followed by Thailand’s Chaiyaporn Rice Co., Ltd. with $725.90 for 100,000 MT, Louis Dreyfus Commodities Asia Pte., Ltd. with $748.89/MT for 100,000 MT, while Toepfer International gave the highest offer at $767.88/MT for 145,000 MT.
NFA has 10 working days to award or reject the bids.
"Yes, possibly," Mr. Estoperez said, when asked if the agency will award the entire 600,000 MT for yesterday’s tender.
NFA allotted P18.525 billion for the tender, up from the original P15.264 billion, pegging the price ceiling at $668/MT.
Mr. Estoperez said NFA’s strategy of not awarding deals immediately after tenders ensured price increases for the auction yesterday would be tame. "If we awarded early, the basis in the following tender will be the highest offer in the previous tender [$768.50/MT last Dec. 8]," he said.
One international rice trader said he was not surprised with price offers yesterday. "That is exactly what the NFA wants. [Holding four consecutive massive tenders] is manipulation of the market," the trader said in a phone interview yesterday. "The Philippines has a lot of money to spare. You need to import a lot of rice for the election season."
Rice stocks as of Oct. 30 stood at 2.383 million MT, deemed sufficient for 67 days worth of consumption, NFA data show.
