THAILAND and Vietnam, the world’s biggest rice exporters, will allow the Philippines to draw from their emergency rice reserves as global stockpiles of cereals drop to the lowest in more than two decades, an official said yesterday.
Vietnam would give the Philippines access to 10,000 metric tons of the rice it had pledged to the Association of Southeast Asian Nations’ emergency reserve, while Thailand agreed to give 15,000 tons, National Food Authority Administrator Jessup Navarro said.
The volume was in addition to the 1.5 million tons Vietnam yesterday agreed to sell to the Philippines this year, he said.
The Philippines is securing supplies of rice overseas, as the nation braces for what Senator Mar Roxas described on March 24 as a “perfect storm” of looming food shortages and rising oil prices.
Robert Zeigler, director-general of the International Rice Research Institute in Los Baños, Laguna, has warned of civil unrest if prices stay high and supply remains tight.
“The worst is yet to come,” Jessica Reyes Cantos, lead convener of the Rice Watch and Action Network, which consists of farmers and researchers, said in a statement on Wednesday. Domestic prices may keep rising even as the harvests peak in April.
Rough rice prices have almost doubled on the Chicago Board of Trade in the past year. May-delivery rice rose as much as 20 cents, or 1 percent, to $19.42 per 100 pounds in Chicago. It was at $19.29 per 100 pounds in after-hours electronic trading as of 5:11 p.m. in Manila.
Global cereal stocks will drop 5 percent this year to the lowest since 1982, helping sustain price gains, the Food and Agriculture Organization of the United Nations said in a report in February.
Countries including the Philippines and South Korea are releasing more rice from their state-controlled inventory to boost domestic supply, while exporters such as Vietnam and China are restricting shipments, as they all struggle to cool inflation triggered by rising food prices.
The Food and Agriculture Organization said in February that 36 countries including China faced food emergencies this year, as global stockpiles of grains dropped.
Consumer prices rose 8.7 percent in February in China, as the worst snowstorms in half a century disrupted food supplies. That’s the fastest pace in 11 years.
Food costs soared 23 percent, China’s statistics bureau said on March 11. China will “strictly control” grain exports to rein in inflation, the National Development Reform Commission said March 5.
Agriculture Secretary Arthur Yap said on March 26 that the government might raise imports of milled rice by as much as 42 percent, to 2.7 million tons this year from 1.9 million tons in 2007, to assure Filipinos there won’t be a food crisis and discourage speculation by local traders.
Rice is the staple diet of 85 percent of the country’s population of 91 million people.
Yap said the NFA “is sensitive to the needs of our citizens. It’s always prepared to counter speculative attacks from traders.”
The agency planned to buy 500,000 tons at a tender on April 17 to help increase domestic stockpiles, Deputy Administrator Vic Jarina said in a telephone interview yesterday.
Suppliers offered less than two-thirds of the 550,000 tons the Philippines sought to buy on March 11, highlighting a global shortage. Companies offered only 83 percent of the 550,000 tons it sought to buy on Jan. 29.
The Philippine will also diversify the countries from which it purchases the grain, Jarina said.
“We used to buy only from Thailand and Vietnam because they already have proven track records,” he said. “Now we’re willing to take rice from any country because of the tightness in supply.”
The government asked fast-food chains and restaurants to start serving half portions of rice to cut wastage, Yap said on March 19. About 25,000, 50-kilogram bags of rice were being wasted every day, he said.
The Philippine franchise of McDonald’s Corp. is studying how it can offer half portions of at its stores, vice president for marketing Margot Torres said in an e-mailed statement.
Chowking, a fast-food chain owned by Jollibee Foods Corp., which outsells McDonald’s in the Philippines, will start offering 100-gram rice for P8 on April 1, Jojo Acero, marketing manager of Jollibee, said by telephone. That’s half the size and price of the rice Chowking now serves its customers, he said.
President Arroyo ordered the cancelation of licenses of 5,000 retailers selling rice supplied by the NFA to check their marketing activities and make sure they aren’t selling the grain at inflated prices.
The agency sells rice at outlets near the residents of Filipinos living on $2 a day, at the subsidized rate of P18.20 a kilogram.
The market price of milled rice gained 13 percent to P27.20 a kilogram in the third week of March, from P24.06 a year earlier, according to the Bureau of Agricultural Statistics’ Web site. Bloomberg
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