The Philippines split a 750,000-tonne rice supply contract between Vietnam and Thailand on Thursday, rushing to boost its shrinking stocks before an El Nino dry weather pattern that is potentially one of worst in 65 years hurts output further. Vietnam, traditionally the Philippines' main supplier, offered a revised price of $426.60 per tonne for 450,000 tonnes of 25 percent broken rice, just below the state grains procurement agency's budget of $426.83 per tonne.
Thailand, the world's second biggest exporter of the grain, agreed to match Vietnam's price, which includes delivery costs, to ship 300,000 tonnes of the same rice variety. Thailand closed the deal as its military government continues efforts to offload rice accumulated under a previous government's subsidy scheme. The two exporters initially offered prices higher than the National Food Authority's (NFA) budget and had their submissions to the buy tender rejected.
Cambodia was invited to participate but did not submit an offer. Ahead of the tender, Vietnam's 25 percent broken rice fell to as low as $315 per tonne, free-on-board Saigon Port, on Wednesday, the lowest since July 2010, based on Reuters data. Import approvals by the NFA for delivery this year have reached nearly 1.8 million tonnes, including 937,000 tonnes already shipped in by the agency and purchases by private traders totalling 600,000 tonnes.
That compares with last year's total purchases of about 1.7 million tonnes. The NFA is seeking delivery of the first 250,000 tonnes of rice in the tender just awarded between November and December, and the balance in the first quarter of next year. The Southeast Asian country has suffered crop losses in recent months due to below normal rainfall and is set to miss its 2015 target for rice output because of El Nino.