March 10 (Bloomberg) -- The Philippines may import more rice than planned as it seeks to secure supplies amid record global costs, according to the nation’s grain-buying agency.
“Many countries are in a stockpiling mode,” National Food Authority Administrator Angelito Banayo said in an interview in Manila yesterday. Rising prices are “a cause for worry,” he said, declining to specify how much the country will buy.
Countries across Africa to Asia are increasing imports to rebuild state reserves to cope with the impact of food prices that reached a record last month. This year’s surge has driven millions into extreme poverty, according to the World Bank, and fueled unrest in the Middle East and Africa. Rice costs have risen 6.8 percent in Chicago in the past year, lagging behind the 58 percent jump in wheat and 92 percent surge in corn.
The Philippines is seeking to more than halve imports to 860,000 tons of rice this year, from about 2.5 million tons in 2010, amid forecasts for a bigger harvest, Banayo said March 7. National Food will buy 200,000 tons and the remaining 660,000 tons will be purchased by private traders. Officials will meet with President Benigno Aquino this week to “validate” the plan “in light of rising commodity prices globally,” Banayo said.
The country may start tendering for rice as early as this month and may accept delivery of imported rice by the end of May, Agriculture Secretary Proceso Alcala said on March 9.
“The high cost of food is a politically sensitive issue in our country,” Philippine Senator Edgardo Angara said in a March 9 statement. About 80 percent of the nation’s population allots 60 percent of their expenditure on food, with half of that budget spent on rice, he said.
Some nations may shift to rice, pressuring supplies and prices, if wheat costs continue to climb, Banayo said.
“We have to start buying before the rainy season” he said. “Harvests in Thailand, Vietnam and Cambodia have begun. We shouldn’t wait for the lean months.”
Rice prices reached a record in January in Indonesia, the world’s fourth-most-populous nation, prompting the government to suspend import tax on the grain, the United Nations Food & Agriculture Organization said last week. Prices stayed at record highs last month in Bangladesh, the largest buyer in South Asia, because of low inventories, according to the report.
Futures for May delivery were little changed at $13.535 per 100 pounds on the Chicago Board of Trade at 11:07 a.m. in Singapore. Prices climbed 21 percent in the second half of 2009 as the Philippines boosted imports to a record.
National Food will allow private traders to bid as early as this month for a so-called service charge that will entitle them to import rice without a 40 percent tax, Banayo said. The agency may hold a tender or enter into government-to-government deals for its purchases, he said.
The government is seeking to recast National Food as rising rice purchases sold at lower prices sunk the state-owned company into debt. It may absorb the agency’s debts, which stood at 161 billion pesos on Dec. 31, and infuse fresh capital, Banayo said.
The plan must be approved by Congress, he said.
To contact the reporters on this story: Cecilia Yap in Manila at firstname.lastname@example.org
To contact the editor responsible for this story: James Poole in Singapore at email@example.com