NFA Council Approves Government-to-Government Rice Import

The National Food Authority Council gave a go-signal for government-to-government procurement of 500,000 metric tons of rice

The Manila Times, Philippines

Sept. 10--The National Food Authority (NFA) Council has given a go-signal for government-to-government procurement of 500,000 metric tons of rice to fill its requirement, even with Thailand yet to renew a supply agreement with Manila.

The plan to enter into bilateral supply contracts with foreign governments came following the failed bidding last August 27. The auction for the import of half-a-million tons of rice failed after all bidders offered prices that exceeded NFA's budget.

With the G2G scheme, the NFA aims to acquire the supply below current market prices.

According to Presidential Assistant on Food Security and Modernization (PAFSAM) Secretary Pangilinan, the interagency NFA Council has agreed to purchase 500,000 MT of long grain white rice at 25 percent brokens.

"Invitations for Cambodia, Thailand and Vietnam to make an offer [have been] sent," Pangilinan said, adding that they scheduled the submission of the offers for Monday.

It was, however, unclear as to why PAFSAM and the NFA allowed

Thailand to participate in the bidding when its supply agreement with the Philippine government has not been renewed.

Department of Foreign Affairs (DFA) spokesperson Charles Jose, citing records by its Geographic Office, said that as of Tuesday, the executive agreement on rice purchase with Thailand has not yet been signed. A government-to-government transaction requires an existing executive agreement for a country to participate in the bidding of the rice.

But political crisis in Thailand continues to paralyze its government's functions, including the much-needed Congress approval for the renewal of trade agreements. An NFA source earlier said that conducting a bilateral agreement, without Thailand, would result in Vietnam's state-run grains supplier being the runaway winner.

"We are also not sure if we can get a better price offer," the source said.

Pangilinan declined comment on the issue, saying, "we will limit our responses to the statement."

The NFA has resorted to a G2G transaction after the failed tender, which was participated in by major industry players in the world market--including Vinafood I, Vinafood II, LG International Corp, and Louis Dreyfus Corp.

The state-run grains agency announced that all bid offers were nonresponsive after the bidders submitted prices that were higher than the $456.60 per MT approved budget for the contract (ABC).

It was the first time the NFA has announced a failure of bidding.

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