NFA wants more bidders for for 250,000 MT rice imports

  • According to NFA, previous G2P schemes several years ago had an average of 10 to 15 bidders.Philstar.com/file photo
    MANILA, Philippines — The National Food Authority wants more bidders for the procurement of 250,000 metric tons (MT) of rice as part of the planned government-to-private sector (G2P) importation scheme.
     
     
    During the pre-bidding conference Thursday, only 11 bidders bought bid documents for the the 250,000 MT (25 percent brokens, long grain white rice, well-milled) to be divided in eight lots.
     
    Although the NFA did not set a target number of bidders to participate, the agency wants to have as many as possible.
     
    "We have eight lots and 11 bidders. We are not saying that it is not enough but we would want to have more and to open up to many bidders as possible," NFA Special Assistant to the Administrator Rachel Miguel said.
     
    "The very purpose of the NFA Council is for more private participation and that the volume will not be from a single supplier only," NFA deputy administrator Tomas Escarez added.
     
    According to NFA, previous G2P schemes several years ago had an average of 10 to 15 bidders.
     
    Of the 11 bidders, five are from Thailand: Ponglarp Co. Ltd., Thai Hua Co. Ltd., Capital Cereals Co. Ltd., Asia Golden Rice Co. Ltd. and Thai Granlux International Inc.
     
    Vietnam has four: Vietnam Northern Food Corp., Vietnam Southern Food Corp. II, Gentraco, and Gia International Corp.
     
    The remaining bidders are Olam International Ltd. from Singapore and Louis Dreyfus Co. from the Netherlands.
     
    The NFA will still accept bidders until the opening of bid documents on July 25.
     
    Of the total import volume, 100,000 MT will be discharged in the port of Manila, 30,000 MT in Batangas, 25,000 MT each in Tabaco, Cebu, Cagayan de Oro, 20,000 MT in Poro Pt. in La Union, 15,000 MT in Davao and 10,000 MT in General Santos City.
     
    The imported volume is expected to arrive starting August until September, the period of the lean season, and the agency has allotted P5.6 billion for the procurement.
     
    Current NFA inventory can only last for five days compared to its mandated buffer stock of having reserves good for at least 15 days at any given time.
     
    Starting this month, which marks the onset of the lean season for rice, the NFA must have at least a 30-day buffer stock to meet the requirements of victims of calamities and emergencies.
     
    "We continue to monitor the supply and we are ready with any eventuality. Nothing to worry, because in the next three weeks, the importation will arrive and we will also be opening the MAV (minimum access volume)," Escarez said.
     
    Based on computations, the 250,000 MT can only cover for seven days.
     
    Following the 32,000-MT daily consumption of the country, at least 544,000 MT is needed to maintain the agency’s buffer stocking mandate.
     
    Escarez said the NFA Council is set to meet next week to prepare the documents for the approval of the terms of reference for the 805,000 MT to be shouldered by the private sector.
     
    Meanwhile, prospective bidders for the 250,000 MT may bid for any of the lots provided that the bid must be the minimum or maximum of the imported rice allocated per lot. The maximum quantity to be awarded per supplier must not be higher than 50,000 MT.
     
    NFA said rice must be shipped in break bulk where packing shall be in 50 kilograms net each in woven polypropylene bags suitable for rice export with NFA markings, designs and specifications.
     
    Winning bidders shall deliver the goods free of obligations and expenses of NFA up to NFA’s designated warehouses. 
  • Rice farmers earn P32B in Q1

  •  By Jed Macapagal

    The National Food Authority (NFA) said palay farmers earned around P32 billion due to high farm-gate prices experienced during the first quarter of 2017. NFA said it bought  131,720 bags from farmers nationwide at the government support price of P17  per kg, plus incentives of P0.70 to P1 per kg for a total amount of P118.5 million.  The remaining harvest for the quarter was sold by farmers to private traders at higher prices averaging P19.80 per kg.  NFA said  farmers who sold palay to the agency at P850 to P900 per bag realized a net profit of at least P39.5 million, while those who sold to traders at an average of P990 per bag earned an estimated P390 per bag or a total of P31.93 billion net profit  based on the Philippine Statistics Authority’s data on the cost of palay production in the country at P12 per kg. NFA said  even with its intensified palay buying activities and incentives, farmers still took advantage of the high prices offered by private traders ranging from  P18  to P22.00 per kg against the government’s support price of P17 per kg plus incentives.  NFA’s number is lower than the Department of Agriculture’s (DA) estimated income of farmers during the quarter.  Last month, Emmanuel Piñol, DA secretary,  estimated that the aggregate income of rice farmers during the first quarter is estimated at P73.08 billion since the buying price of paddy rice by traders has gone to as high as P21 per kilo or an increase of between P7 to P9 per kilo from the previous seasons.  “It is the mandate of the NFA to stabilize the price of rice in the market and we know  NFA serves as the benchmark for the price of palay. It influences the buying price of private traders to go higher than the support price for them to corner the volume they need. Without NFA as a stabilizer, the traders can dictate the price of palay, short-changing the farmers whenever they can,” said Jason Laureano Aquino, NFA administration said in a statement.   ”We don’t base our performance solely on how much we have procured because we are limited by the government support price of P17 per kg.  We cannot go beyond that. What is important is that the farmers are enjoying much higher prices from private traders and that is good. The NFA’s presence is meant to stabilize the price of palay, not to directly compete with the traders,” he added.    For this year, the NFA targets to buy 4.6 million bags equivalent to 230,367 metric tons of palay to augment rice requirement for distribution and buffer stocking.  Aquino said  at the present government support price of P17.70 to P18 per kg of palay, NFA is giving farmers a net profit of at least P285 to P300 per bag.  NFA also assured there is enough rice in Marawi City, which is currently being ravaged by the conflict between government troops and the Maute terrorist group.  “We assure all residents of Marawi and the rest of Mindanao that we have enough rice in NFA warehouses in the area. We are ready to issue rice to relief-giving agencies such as the Department of Social Welfare and Development, Philippine National Red Cross and local government units anytime they would need it to distribute to the affected residents,” Aquino said. He said  NFA rice stocks for the whole of Mindanao currently stands at 1,504,190 bags and that its offices in other regions, if necessary, are ready to augment the buffer stocks in the region to effectively meet the residents’ rice requirements during the 60-day implementation of martial law in the area.
  • Averting a rice shortage

  • Is there an impending rice supply shortfall? There will be, unless concerned government agencies put their acts together and avoid what could be a period of high rice prices when the lean harvest season starts in July. Agriculture Secretary Manny Piñol claims there will be a bumper rice harvest. Based on projections by the Philippine Statistics Authority (PSA), rice production this year may be 30 percent more than last year, hitting 22.9 million metric tons in 2017. But the big question is, is this enough to supply our needs? The National Food Authority Council (NFAC) headed by Cabinet Secretary Leoncio Evasco Jr. ordered NFA administrator Jason Laureano Aquino to extend the issuance of import permits for the remaining rice allotments of 52,776.10 metric tons or 7.62 percent of the 692,340 metric tons under the 2016 Minimum Allotment Volume (MAV) importation program from Feb. 28 to March 31. However, Aquino is said to have issued only import permits for shipments coming from Pakistan and India. He advised the Bureau of Customs to seize the other shipments especially those imported from Thailand and Vietnam and to allow only imports coming in not later than Feb. 28. Among these importers are legitimate ones like Pilmico Food Corp. of the Aboitiz Group who pre-qualified and joined the minimum access volume (MAV) program in good faith, ordered their rice shipments, and paid in advance the customs duties through the Land Bank of the Philippines (LBP). Now, with their goods subject for seizure, they are made to pay the extra cost for storage fees and demurrage. The NFA administrator is also said to have defied Evasco when he engaged in backdoor negotiations with Vietnam and Thailand for government-to-government importations without the knowledge of higher authorities like the NFAC and the Department of Foreign Affairs (DFA). Evasco said Aquino’s refusal to implement the NFAC’s decision to stretch the deadline for the entry of rice imports under the MAV to March 31 may affect the country’s food security. The NFAC also disapproved Aquino’s proposal to import this year under government-to-government transactions in lieu of private sector importation. Evasco said that government importations will only increase NFA’s piled-up debts. Just who is this Aquino who is becoming the subject of controversy not only in media but also in the halls of power? An article by Rappler said the Bureau of Customs in 2015 published a notice to warn the public against transacting with retired army major Jason Aquino who was accused together with other employees of colluding with smugglers. Aquino was appointed to the NFA  on Dec. 29, 2016. The notice was signed by then Customs deputy commissioner for the intelligence group Jesse Dellosa, who eased out Aquino as an agent for negotiating and receiving ‘tara’ or grease money for rice shipments. But on April 5 and despite what Evasco has said about Aquino, President Duterte instead fired Evasco’s undersecretary, Halmen Valdez, and dismissed as loose talk the corruption allegations against Aquino, the same article mentioned. Valdez was in favor of extending the MAV period. Aquino is said to have yellow connections, being the emissary of then political affairs secretary Ronald Llamas in a failed attempt to turn election commissioner Virgilio Garcillano into a state witness in 2011. The MAV refers to the volume of a specific agricultural product that is allowed to be imported by the private sector with lower tariff as committed by the Philippines to the World Trade Organization under the Uruguay Final Act. While rice imports under the MAV are done at no cost to the government, importations by the NFA on the other hand cost money. The NFA already reportedly has an accumulated debt of P211 billion incurred from government-to-government rice importations. Just why the NFA is advocating for government-to-government importation escapes me. Trade and Industry Secretary Mon Lopez has said the President has agreed in principle to allow the private sector to import rice after being informed that government-to-government rice imports would need large funds. He added that government would benefit from private sector imports because they would have to pay tariffs. It is about time that a meeting by the NFAC with President Duterte be held to address the impending rice supply crisis, given that the summer bumper harvest being mentioned by Secretary Piñol will be consumed by next month.

    Give credit where credit is due

    The recent Association of Southeast Asian Nations (ASEAN) 2017 summit is widely acknowledged as a resounding success. The Presidential Communications Operations Office (PCOO) led by Presidential Communications Secretary Martin  Andanar did a good job in making sure that information regarding ASEAN 2017 would be properly disseminated to media. The PCOO was the lead agency of the ASEAN 2017 Committee on Media Affairs and Strategic Communications (CMASC) which was in charge of setting up the International Media Center at the Conrad Hotel. The Media Center accommodated over a thousand local and international media personnel, with state-of-the-art equipment, high-speed internet, news rooms, comfortable lounges and, of course, food. The CMASC also provided media support, registration and accreditation for the meetings, and various communications activities to promote better appreciation of the goals and programs of ASEAN. They put up a website and opened several social media accounts as channels of information to promote strategic messaging direction and content for ASEAN 2017. These include over a hundred news and feature articles used in both mainstream and social media, as well as photo services. Media coverage reached a broader audience via livestreaming of the events handled by Radio-TV Malacañang (RTVM). In cooperation with the National Commission on the Culture and the Arts, they launched the official music video on ASEAN 2017. They also conducted school tours to promote awareness of ASEAN and the significance of Philippine chairmanship of the regional bloc that is celebrating its 50th anniversary this year. Apart from these, they produced a digital show entitled, “#ASEAN2017 in Focus” to highlight the importance of the Philippine chairmanship of this year's event. PCOO also conducted roadshows around the country to explain to the public the ASEAN’s current thrusts and activities 50 years after its founding, how it is relevant to the people and how it can impact  their daily lives especially in uplifting their  economic situation.  And to think that it had only six months to make the necessary preparations.
  • Rice imports deferred

  •  The government has decided to formally defer the importation of 250,000 metric tons of rice despite the continued insistence of the National Food Authority (NFA) to buy from international sources. File
    MANILA, Philippines -  The government has decided to formally defer the importation of 250,000 metric tons of rice despite the continued insistence of the National Food Authority (NFA) to buy from international sources.
     NFA administrator Jason Aquino had been pushing for an immediate government-to-government importation of 250,000 MT of rice despite a projected bumper harvest from local farmers. But during the NFA Council meeting last week, members decided not to approve the NFA’s proposal to import the volume via government-to-government scheme anytime soon. “We did not receive any approval. If we did, we would have received the letter saying we can proceed with the importation,” NFA spokesperson Marietta Ablaza said. Bangko Sentral ng Pilipinas (BSP) deputy governor Diwa Guinigundo warned that a government-to-government importation may expose the NFA to further indebtedness. “I think all of us what to make sure on one hand, the price of rice will be maintained and be stable, while at the same time avoid exposing the NFA to further indebtedness. We are also cognizant of the need to avoid getting more rice when you have the so-called summer harvest coming in,” he said. Guinigundo serves as the BSP governor’s representative to the NFA Council, which also include the Cabinet Secretary, the NFA administrator, chairman of the Development Bank of the Philippines, president of the Land Bank of the Philippines, finance secretary, trade secretary, the National Economic and Development Authority and a representative of a farmer’s group. The 250,000 MT of rice is supposed to serve as the country’s buffer stock in preparation for the onset of the lean months. Under the law, the NFA is tasked to buy the palay produce of local farmers as buffer stock for calamities and other contingencies. President Duterte already ordered the NFA to prioritize rice purchase from local farmers, but the agency maintained that it can no longer buy more and hit its target following higher prices offered by private traders. NFA’s field monitoring shows traders are buying palay (unhusked rice) from the summer harvest at an average of P18-P20 per kilogram while the government support price remains at P17 per kg. The NFA targets to procure 4.6 million bags or about 230,000 MT of palay from local farmers nationwide until yearend to boost buffer stock and rice distribution requirements. As of the end first quarter, the NFA has bought approximately 21 percent of its 2017 procurement target. The palay-buying for the first three months of the year is significantly lower by almost 80 percent as it only bought 134,355 bags compared to the 603,915 bags in 2016 due to higher than average farm-gate price of palay. This year, the agency has a P5-billion budget for the procurement of palay. The NFA is mandated to maintain a food security reserve good for at least 15 days at any given time. By July 1, which marks the onset of the lean season for rice, the NFA must have at least a 30-day buffer stock to meet the requirements of victims of calamities and emergencies. Latest data from the Philippine Statistics Authority (PSA) showed that the country’s rice inventory in March declined by 19 percent to 2.18 million MT, from 2.67 million MT recorded a year ago. The agency reported that total rice inventory as of March was also five percent lower than the 2.3 million MT posted in February.

    ‘Rice stock still sufficient’

    But Guinigundo allayed fears of a possible uptick in rice prices amid the issues that hound the country’s rice importation, asserting that the country has ample supply until the end of harvest season. He said based on data from the PSA, the country’s rice inventory is still sufficient for 69 days. This rice buffer would be further augmented by the summer harvest, which will last until June. “We don’t believe rice prices will move up in a very significant way,” Guinigundo said during a briefing on the country’s first quarter 2017 inflation. Concerns of a possible rice inflation surfaced as Duterte decided to stop all rice importations in the country. Officials have also argued over rice import policies, whether to import through the private sector or through a government-to-government scheme. Guinigundo said the government also allows private sector importation through the minimum access volume (MAV) scheme, which is the country’s commitment to the World Trade Organization while its quantitative restriction on rice has not been lifted yet. In terms of the MAV, some of the rice imported by traders from abroad has not yet entered the country. “The decision of the council is to extend (MAV) to end-March 2017. But there were issues because some of the rice from abroad has not entered yet. Hopefully, this will be resolved soon so additional supply will be available and that will provide additional support to stability of rice prices,” he added.