Rice imports could hit 2.2M tons


March 27, 2008


http://www.bworldon line.com/ BW032708/ content.php? id=003

CLARK, Pampanga — The Philippines aims to import up to 2.2 million tons of rice this year in what could be the biggest overseas purchase of the staple in a decade.


Agriculture Secretary Arthur C. Yap yesterday said the government was looking to buy between 1.8 million and 2.2 million tons of rice, up from an earlier 1.6-1.8 million tons, to meet a domestic shortfall.


"This will all be very sufficient for the NFA (National Food Authority) to ensure that there will be food security in the coming months, especially the lean months," Mr. Yap said, after signing a supply agreement with Vietnam on the sidelines of an economic conference north of Manila.


"I'm not worried about 2008, we're going to have the supply. I'm worried about 2009."


President Gloria Macapagal Arroyo has taken a personal interest in the country's rice supplies for fear a shortage in between harvests in the third quarter could spell political trouble for her.


Earlier this year, she asked the Vietnamese Prime Minister to guarantee Manila up to 1.5 million tons of annual supply.


The supply agreement signed by Mr. Yap and the Vietnamese ambassador on Wednesday specified up to 1.5 million tons, but Hanoi has previously said it could only guarantee Manila one million tons of rice this year.


Manila has already imported about 700,000-800, 000 tons of Vietnamese rice this year, but Mr. Yap said the 1.5 million tons would be in addition to that. However, Manila may not exercise the option to buy the entire amount, he said.


The agreement's framework is valid for three years and would be automatically renewed for another three unless either country objected.


"We'll try to sell to the Philippines as much as we can," said Ambassador Xu Xuan Pruong.


The Philippines was one of the world's top importers of rice last year, with purchases of nearly 1.9 million tons, almost three-quarters of which came from Vietnam.

The Southeast Asian country imported 2.4 million tons of rice in 1998 during the Asian financial crisis.


So far, Manila has bought about 1.2 million tons of rice for this year and aims to increase domestic production of unmilled rice to a record 17.32 million tons, up 7% from last year.


Mr. Yap said Manila's imports could exceed the planned 2.2 million tons if the government decided to build up buffer stocks for 2009. NFA rice stocks at the beginning of February were good for eight days.


For next year the government plans to increase the amount of land devoted to rice production. But even with rising local harvests, the output is not enough to keep up with a rapidly expanding population of three babies born every minute.


The soaring cost of rice has also helped push annual inflation to a 16-month high of 5.4% and put a real strain on the poor, who make up the bulk of the Philippines' 90 million people and rely on the grain to survive.


In a statement, Mr. Yap said the agreement with Vietnam complements a recent move of the United States Department of Agriculture to increase the Philippines' credit commodity program to $75 million.


The Agriculture chief also assured the public that the country has enough rice for the rest of the year.


"Don't take my word for it. Just go to any public market or retail outlet selling rice and you will find out for yourself that there is no rice shortage. There is enough rice for everyone," he said.


He said the additional supply from Vietnam and the US would be augmented by local production as the summer harvest season and the wet planting season are coming up.


The Bureau of Agricultural Statistics forecasts the April to June harvest to yield 7.1 million tons of rice, higher than the 6.7 tons in the same period last year.


The government expects 2008 total production to reach 17.32 million tons, higher than last year's yield of 16.24 million tons.


Farmers' groups and nongovernment organizations, meanwhile, yesterday urged the government to implement a more comprehensive rice policy.


Investments should be focused more on rural development rather than urban infrastructure, they said. One of their demands was the eradication of the rice cartel, which according to the farmers only benefits traders, and that the government buy directly from the farms.


The farmers also predicted that rice prices would rise to P40 per kilo by July, up from around P30 at present, given the tight supply.


— main report by Reuters





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