Manila Scraps Rice Tender,
Expects Price to Fall
By PRASENJIT BHATTACHARYA
May 5, 2008 1:44 p.m.
The Philippines, the world's biggest rice importer, called off its largest rice tender of the year Monday, saying it expects prices to fall over the next few months.
The development is one of several signs that prices for the grain may have peaked after breaking records in recent months, according to commodities traders and analysts.
International rice prices have tripled this year, driven up by growing demand and the lowest global rice stockpiles in almost 30 years. But in recent days, both physical and futures prices have declined.
The Chicago Board of Trade's July rice-futures contract was little changed Monday at $20.96 per 100 pounds (45 kilograms), but that is down 16% from a record high of $25.07 April 24.
The decision of the Philippines' state-run National Food Authority to scrap its latest rice tender spurred more talk among commodity analysts and traders about a correction following this year's rapid rise in prices, especially because the Philippines has been buying aggressively in recent months. The NFA typically calls for public tenders to purchase rice internationally to make up for a shortfall in domestic production of about 10% annually.
"It's definitely a bearish signal for world prices," said Vichai Sriprasert, president of Bangkok-based trading company Riceland International Co. Ltd. He said traders will keep a close eye on whether private buyers from the Philippines will still try to import rice.
Chookiat Ophaswongse, president of the Rice Exporters Association of Thailand, the world's biggest exporter, said the free-on-board price of 100% B-grade Thai white rice -- an industry benchmark -- is now around $940 a metric ton on a cost and freight basis. That's down $50 a ton from a month ago and sharply lower than the $1,135 a ton the Philippines paid for a Thai shipment late last month.
Earlier Monday, the Philippines tried to secure 675,000 tons of imported rice through a tender. But the NAF canceled the tender after receiving just one bid, saying it couldn't accept a lone offer even if the offer price was attractive. Traders cited new NFA rules for the lack of bidders. The new rules require the NFA to buy from foreign government agencies or private suppliers with government guarantees to ensure orders can be met fully. Traders said foreign state agencies were likely preoccupied with securing domestic supplies in their own country.
The NFA's decision not to immediately schedule another tender could mean less demand for rice shipments in the coming week.
"We will wait for softer prices before scheduling another tender," Ludovico Jarina, deputy administrator of the NFA, told reporters. "Considering we have already procured a total of 1.71 million tons -- the critical mass volume we need -- it's enough to tide us over the lean months. We can get the rest another time."
Though the Philippines' temporary withdrawal from the market could hurt prices, it doesn't mean demand has dried up.
Nigerian buyers, for example, are likely to buy 500,000 tons of parboiled rice -- or rice cooked in the husk -- from Thailand at $950 a ton on a cost-and-freight basis, to be delivered between May and July, traders said.
Other countries such as Sri Lanka, Bangladesh, Iran and Iraq are also making inquiries to Thailand about possible rice purchases, keeping demand strong even in the absence of the Philippines.
Meanwhile, in a bid to boost local stocks further, the Philippines is negotiating for the release of as much as 100,000 tons of rice from an emergency stockpile established by other Asian countries.
The emergency reserve established by the Association of South East Asian Nations Plus 3, which includes China, Japan and South Korea as well as the Asean countries, totals about 300,000 tons excluding a specified amount committed by China and South Korea, the NFA said. |
发表于 2008-5-6 08:14:03
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