MANILA, Philippines – Philippine Agriculture Secretary Proceso Alcala said Wednesday that the state-run National Food Authority (NFA) will buy 200,000 tons of rice from Vietnam in a government-to-government deal.
Alcala also said he wanted the tenders for private sector rice import rights to be held this month, with traders allowed to buy up to 660,000 tons of the grain.
The government wants all shipments, including the NFA purchases, to arrive from late May and into June.
''It will be a government-to-government deal. Vietnam has actually given us guarantee that they can supply our requirements,'' Alcala told reporters.
He said private traders can also buy the entire 660,000 tons from Vietnam.
''The private sector will be allowed to negotiate for their own purchases, but will not be obliged to buy solely from Vietnam. They can buy from other exporters if they can negotiate for a cheaper price,'' Alcala said.
The Philippines has an existing rice supply agreement with Vietnam, which was extended to 2013.
A trader in Ho Chi Minh City said: ''It means they (the Philippines) also have rice shortage, unlike before when it seemed they were slow in their purchase.''
The Philippines' latest demand, coupled with a planned Bangladeshi purchase of 200,000 tons of Vietnamese rice, is small compared with Vietnam's output available for export from its current harvest of 3 million tons of milled rice.
But once the deals are finalized, these could help halt a fall on domestic and export prices in Vietnam, the world's second-largest exporter of the grain after Thailand.
The Philippines has approved rice imports of 1.3 million tons for 2011 but has indicated it wanted to limit shipments to about two-thirds of that, relinquishing its position in recent years as the world's biggest buyer of rice.
For 2010, Manila imported a record 2.45 million tons.
''We approved an import volume of 1.3 million tons to consider emergency purchases if we don't meet our production targets,'' Alcala said.
The government wants the private sector to take over the country's rice purchases to reduce the NFA's financial burden.
Such purchases are tariff-free, with the traders instead paying a service fee to the NFA for bringing in rice.