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27 Oct 2009


Philippine Rice Import Bidding Spur the Market at Year-End (Business Brief No.2673)

The Philippines will be holding a bidding to supply them with a total of 250,000 tons of rice on October 30, 2009, wherein they want the grain to be delivered between January and April 2010. This is the first Philippine rice purchase in 2009 and is two months earlier than normal for them. This is due to the country’s main rice-growing areas having been badly battered by typhoons across 500,000 hectares (around 3.13 million rai) that were badly damaged, including almost 840,000 tons equivalent to their consumption for around 15 days, following the landfalls of the Ketsana and Parma typhoons on the island of Luzon, an important rice growing region, around the end of September 2009.
However, this time the Philippine government is specifying delivery in January, signaling that the country is at risk of an immediate rice shortage, but that they are only ensuring that they will have enough rice for domestic consumption before the elections in May 2010. If a rice shortage occurs in the Philippines, it would seriously affect the government’s candidates.
It is expected that in 2010, the Philippine government may buy 2.4 million tons of rice, increasing 20.0 percent over 2009, and this rice purchase will spur the market at the end of the year. However, panic is not likely to occur in the global rice market as in 2008 when the Philippine government ordered a huge lot of rice but the world’s key rice producing countries – particularly India and Vietnam – were limiting their exports, resulting in skyrocketing rice prices in the global market.

One point that we should watch in the Philippines rice market in 2010 is the projection by the United States Department of Agriculture that the Philippines will increase their rice imports to 2.4 million tons, increasing 20.0 percent over 2009. Therefore, the Philippine rice market should be very interesting for Thai rice exporters. They should monitor the negotiations regarding Philippine rice liberalization per the AFTA.

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