Philippines fails to contract expected amount of rice.

This shows just how serious the global rice shortage is as the Philippines managed to buy only about two thirds of what it had hoped and at much higher prices than they predicted. The rising cost of the rice subsidy hurts the Philippine treasury and no doubt the differential between subsidised and market price rice will generate numerous corrupt deals.

This is from Xinhua.
Philippines fails to contract expected amount of rice


www.chinaview.cn 2008-04-17 16:46:48 Print

MANILA, April 17 (Xinhua) -- The Philippines failed to secure the expected 500,000 metric tons of rice from international bidders in Thursday's rice tender, the third in the year held to hedge against a rice supply shortage evolving into a serious national crisis.

Only 325,750 metric tons of rice was offered at prices ranging from 872.5 U.S. dollars to 1,220 U.S. dollars per metric ton, the national television network GMA News said.

It quoted Ludovico Jarina, deputy head of the National Food Authority (NFA), the government's importing arm, as saying that the bidding prices exceeded the agency's expectation of 900 U.S. dollars per metric ton in maximum.

As one of the world's top rice importers, the Philippines expected to buy not less than 2.2 million metric tons of rice overseas to feed its people in 2008. It has purchased about 1.2 million metric tons at a cost of 626 million U.S. dollars due to soaring grain prices in the global market.

Half of the contracted amount has arrived while 90,000 metric tons are on the way, Philippine President Gloria Macapagal-Arroyo told the public in a Tuesday's address, saying that the rice supply "is secure for the foreseeable future."

Thursday's contracted amount is set for April to June delivery while the government is planning another tender on May 2.

Credit Suisse, the Swiss-based investment bank, predicted the Philippines would spend up to one percent of GDP to deal with the rice crisis this year because the government vowed to maintain the price of subsidized rice sold in domestic market unchanged at 18.25 pesos per kilogram (0.445 U.S. dollars) despite the price of imported rice that almost doubled since the start of the year.