Nov. 9 (Bloomberg) -- The Philippines, the world’s top rice importer, plans its biggest tender next month after storms hurt local harvests, raising competition between importers for global supplies even as output drops.

The National Food Authority will buy 600,000 metric tons for delivery between February and May, according to an advertisement today in the Philippine Daily Inquirer. The authority last week agreed to buy 250,000 tons in the earliest ever tender for next-year supplies. The combined purchases represent almost half of the country’s imports this year.

The Philippine announcement may have a “psychological effect” on the global market and boost benchmark Thai prices by as much as 10 percent, according to Chookiat Ophaswongse, president of the Thai Rice Exporters’ Association. Rice, which touched a record last year, is the most important staple in Asia.

“That’s a massive purchase,” Peter McGuire, managing director at CWA Global Markets Pty, said by phone from Sydney. “It’s going to underpin prices, probably push prices higher,” McGuire said.

Rice futures in Chicago jumped 11 percent in the past month to the highest since January on investors’ concern that global supplies may drop, including in India after a drought. The January contract fell 0.4 percent to $15.10 per 100 pounds at 11:36 a.m. in Singapore. The April 2008 record is $25.07.

Food Crisis

Rice, wheat and palm oil surged to all-time highs last year, sparking concern among policy makers that there may be a global food crisis as food riots broke out in nations including Haiti and Egypt. Japan plans to commit 13 percent of its rice stockpile to build reserves with other Asian countries, Shirara Shiokawa, director at the grain trade division, said on Nov. 6.

The Philippines is not able to grow enough rice to meet national demand, with a shortfall of about 10 percent of annual needs. The nation imported 2.4 million tons in 2008 and about 1.78 million tons this year, buying most supplies from Vietnam, the number-two exporter, and Thailand. The two tenders for 2010 supplies represent 48 percent of this year’s imports.

To be sure, “Thailand may have a limited chance of winning significant orders as prices are less competitive than a key rival,” said Chookiat, the head of the exporters’ group. Thai prices are about $50 to $60 per ton higher than Vietnam’s, with Thai 100 percent grade-B white rice set at $541 last week.

Record Tender

The latest Philippine tender, for 25 percent broken rice, would be the largest by the state-run agency, authority spokesman Rex Estoperez said today by phone. The National Food Authority has a budget of 15.26 billion pesos ($321 million) for the purchase, according to the notice in the newspaper.

Philippine Agriculture Secretary Arthur Yap said last month that rice may return to a record and that the government wants “to make sure we will not be late in the market.” Dwight Roberts, president of the U.S. Rice Producers’ Association, also said last month that a return to record prices was a “possibility,” and the global market was “on thin ice.”

The global rice crop is forecast to drop 2.7 percent to 433.7 million tons in the 2009-2010 marketing year as output in India, the second-largest grower, slumps, the U.S. Department of Agriculture estimated on Oct. 9. The Philippines lost at least 1 million tons in two recent storms.

To contact the reporters on this story: Cecilia Yap in Manila at cyap19@bloomberg.net; Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Supunnabul Suwannakij in Bangkok at ssuwannakij@bloomberg.net

Last Updated: November 8, 2009 23:11 EST