There are many
signs showing that the changes in the Philippines’ rice import policy just aims
to create a competition among rice exporters which will force prices down,
according to Nguyen Dinh Bich, a well known trade expert in Vietnam.

The Philippines remains the biggest rice importer
from Vietnam and consumes 25
percent of Vietnam’s
total exports. Therefore, the news that the country has decided to apply
policies on diversifying import markets and importers has worried Vietnamese
exporters.

Just within
1.5 months in late 2009, the Philippine government allowed the National Food
Agency (NFA) to open four bids to seek 2.176 billion tons of rice for 2010 and
it finally bought the volume of rice at 637 dollars C&F.

However,
everything seems to be quite different this year. To date, NFA has just
completed negotiations on importing 200,000 tons of rice from Vietnam ($445
per ton FOB, 25 percent broken rice). The process of allowing private companies
to join bids to seek the import of 660,000 tons of rice has just initiated.
Therefore, if everything goes smoothly, the companies will only begin
contacting exporters from different countries to conduct negotiations on import
deals.

If the
country imports 660,000 tons of more rice, the total volume of rice it will
import in 2011 will be 860,000 tons. However, a question has still been raised
that whether 860,000 tons would be the final decision.

Nguyen Dinh
Bich, a well known trade expert in Vietnam,
wrote on Thoi Bao Kinh Te Saigon that there is every reason to believe that the
moves made by the Philippines
so far are just part of a larger strategy that aims to import more rice at the
lowest possible prices.

According
to the US Agriculture Department, in the last three consecutive crops, the
volumes of rice imported by the Philippines
were all equal to or higher than two million tons (2.5, 2 and 2.4 million
tons).

The
department has predicted the import volume will be 1.5 million tons for this
year. Meanwhile, the Philippine government has announced it will import 860,000
tons this year, or 640,000 tons lower than the predicted level.

The figures
have raised doubts among analysts, because 640,000 tons is an overly high
figure, which is well higher than the expected rice output in the Philippines.

In the last
three years, the total rice output of the Philippines was only 10 million
tons on average, while the country consumed 13 million tons. In such
conditions, even though the predicted rice output increase of 580,000 tons in
the Philippines
comes true, the import volume of 1.5 million tons will still make the country’s
reserves decrease to 2.23 million tons from 3.35 million tons last crop.

If the
figures of the output and consumption predicted by the US Agriculture
Department come true, and the Philippines
only imports 860,000 tons as announced, the rice stock of the nation would drop
to 1.6 million tons. The small reserved volume proves to be too risky for the
country with the population of approximately of 100 million people, and a
region that always witnesses natural calamities.

There are
also signs that show that the prediction about the 580,000 ton output increase
in 2011 may not come true. In order to reduce imports by 640,000 tons, the Philippines
will have to increase the rice output of 1.8 million tons of rice, nearly an
impossible mission.

While Myanmar has to close doors on the rice market to
curb inflation, and Pakistan
also has to cut down the exported volume this year, the main targeted markets
for Filipino private companies will be Thailand,
Vietnam and Cambodia. Thailand’s biggest export volume to the Philippines was
600,000 tons (in 2008). Meanwhile, Cambodia’s
rice export capacity proves to be limited if compared with the import volume of
the Philippines.

In related
news, Vietnam
plans to export two million tons of rice in the second quarter of the year, an
increase of 150,000 tons over the first quarter. To date, Vietnamese exporters
have orders to export 1.6 million tons or rice, and they only need to seek
orders to export the remaining 400,000 tons.

C. V