Dec. 8 (Bloomberg) -- The Philippines, the world’s biggest rice importer, attracted fewer offers today, and sellers sought at least 30 percent more than the average price agreed in last month’s tender, signaling scarcer global supplies.
The number of qualified traders offering to sell rice dropped to five, from 10 in November, according to the state-run National Food Authority. Traders offered 1.125 million tons at prices ranging from $618.95 to $768.50 a ton, compared with an average price of $475.40 the authority agreed to pay last month.
“There is no rice in the market, that’s why Vinafood 2 is the only Vietnamese supplier†at today’s tender, Rakesh Singh, a trader at Emmsons International Ltd., said by phone from New Delhi, referring to Vietnam Southern. “The market is speculating that Thailand will not be selling its stockpiles until prices rise to $700†a ton, he said.
The Southeast Asian nation advanced imports after storms damaged at least 1.3 million tons of crops and on concern India, the second-largest grower and consumer, may return to the world market, increasing competition for supplies. Last week, the Philippines raised its budget for a Dec. 15 tender by 21 percent, signaling the government will stay in the market as prices climb.
Rice prices jumped to a record last year as the Philippines boosted imports to 2.4 million tons, the highest level ever, and exporters including India and Vietnam restricted shipments, fueling concern global food supplies were shrinking. Futures in Chicago have jumped 38 percent from this year’s low of $11.195 per 100 pounds and traded at $15.55 at 4:42 p.m. Singapore time.
Holding Supplies
Farmers are holding on to their supplies expecting prices will rise, leaving less rice for traders to offer at Philippine tenders, Singh said.
Farmers and exporters may demand higher prices by the time traders seek supplies to meet their obligations to the Philippines, “crimping their capacity to deliver,†National Food Authority Marketing Director Romeo Jimenez said in an interview in Manila today.
Thai 100 percent grade-B white rice, the regional benchmark, was set last week at $622 a ton, up 18 percent from this year’s low of $525 in October. The price of 25-percent broken rice, the grade sought by the Philippines, was $490 a ton, up from a low of $414 a ton in October.
Traders may have stayed away from today’s tender “as a matter of strategy,†and may offer the grain at the next 600,000-ton tender scheduled for Dec. 15, National Food Deputy Administrator Vic Jarina told reporters in Manila today. Tender results are usually announced within five working days.
National Food raised its budget for the planned Dec. 15 tender for the same volume to 18.525 billion pesos, from 15.26 billion pesos, because “prices are moving,†National Food Spokesman Rex Estoperez said Dec. 3.
India may consider importing rice “to ensure availability at affordable†prices if volumes bought from farmers fall short of requirements, Junior Trade Minister Jyotiraditya Scindia said in a written reply to the parliament in New Delhi yesterday.
by Cecilia Yap and Luzi Ann Javier
