The Philippine government said on Tuesday it had rejected the price offers in the auction for 100,000 metric tons (MT) of rice imports as the quotations were higher than the budget it has approved.
The National Food Authority (NFA) said the offers made by Thailand, Vietnam and Cambodia were higher than the reference price of $408.14 per MT (based on cost, insurance and freight) set by the NFA Council for the purchase of rice under a government-to-government (G-to-G) deal.
“Any beyond the reference price set by the NFA will be rejected,” NFA Deputy Administrator Joseph de la Cruz said in an interview.
Vietnam and Thailand initially offered $417 per MT and $418 per MT for 100,000 MT of 25-percent well-milled broken rice, respectively. Cambodia offered $459.50 per MT for only 50,000 MT. NFA eventually asked their representatives to revise their quotations.
Thailand decided not to submit a revised quotation, while Cambodia’s final offer was $455.50 per MT for 50,000 MT, while Vietnam offered $416.85 per MT for 100,000 MT of rice.
When asked if the reference price was “too low,” de la Cruz said the NFA based their computations on the prevailing price of rice in the world market.
“We based our prices on sources like Oryza, Board of Trade of Thailand and the Thai Rice Exporters Association. The price ranges from $330 per MT to $362 per MT. We average at around $346 per MT ,” he said.
De la Cruz said the increase in buyers for rice from the three Southeast Asian countries may have caused prices to go up in recent weeks.
Patricia Galang de Jesus, NFA assistant to the administrator, said the NFA Council will discuss the results of the bidding on Wednesday and decide whether it will accept or decline the lowest offer.
“The revised offers will be evaluated based on the lowest price. We neither accept nor reject the offers, we are referring the matter to the NFA council for their decision,” she said. The 100,000 MT is the last tranche of the 250,000 MT, which the NFA council has approved for purchase via the G-to-G scheme. The NFA held its first tender for the 250,000 MT of rice on June 5.
Vietnam was formally awarded the contract to supply 150,000 MT of rice to the Philippines, valued at $61.58 million, on June 14.
The NFA is required by law to have at least a 15-day buffer stock at any given time and a 30-day buffer stock during the lean months.
According to de la Cruz, the NFA currently has a buffer stock of 750,000 MT which is good for 24 days.