PITC, SMC line up for rice importation

MANILA, Philippines — An attached agency of the Department of Trade and Industry (DTI) wants to import up to 150,000 metric tons (MT), or three million bags of rice, in a bid to augment the current supply of the National Food Authority (NFA).

In a statement, the DTI said it is tapping the bulk procurement expertise of the Philippine International Trading Corp. (PITC) to bring in more rice through government-to-government procurement.

Trade Undersecretary Ruth Castelo said they are waiting for the NFA Council to clear this proposal.

She added that with PITC’s proven international trading experience, they expect the rice to arrive by December and plans to sell them to consumers at P27 to P32 per kilo.

“DTI’s effort is part of the government’s all-out efforts to find concrete solution by tapping various agencies to extend assistance in bringing down prices of rice,” she said.

PITC president and CEO Dave Almarinez said the PITC supports efforts to address the current artificial rice shortage.

“Smuggling, hoarding and ‘man-made’ price manipulation in the rice industry are the main reasons why low-income families are now facing difficulties in buying affordable rice within their means. They had to endure long lines just to buy evenly-priced rice rationed and supplied by the NFA in designated areas,”he said.

Almarinez added that PITC supports the DTI and NFA in their efforts to prevent rice hoarders from hurting the country’s economy and lives of millions of Filipinos.

The subsidized rice – priced at P27 and P32 a kilo depending on the variant – is considered the only reprieve for poor Filipino consumers from the current prices of commercial rice, which have reached an average all-time high of P43 a kilo.

Last week, NFA  approved additional importation of rice to purchase 250,000 MT of rice this year under an open tender scheme. This action will bring the agency’s rice imports for the year to 750,000 MT, including the half a million ton of imports approved earlier this year.

“NFA’s strategy to flood the market with affordable rice is laudable, but an open tender scheme might take a longer time to implement,” the DTI said.

It added that if PITC is tapped, it will be able implement strategies that will be effective to bring down the price of rice even before imported rice reached the country.

“By flooding the market with imported rice, hoarders will be left no option but to release their supply in market and eventually stabilize the prices of rice,” the agency said.

PITC has been playing a leading role in some critical economic programs of the DTI since 1973, as well as helped bring down the cost of medicines in the 1900s and 2000s.

Meanwhile, food-to-infrastructure conglomerate San Miguel Corp. has expressed interest to foray into rice importation to help augment the supply of the country’s main staple, its vice chairman, president and COO Ramon Ang told reporters.

“We will help by importing. We have grain terminals where we can build extra silos…We will be able to help in the food security,” Ang told reporters yesterday n the sidelines of the stockholders’ meeting of San Miguel Food & Beverage Inc.

Ang said the silos would allow proper storage of rice so that SMC can import rice by bulk and not just by sacks and can store the commodity for as long as two years.

They are now just waiting for the passage of the rice tariffication measure which seeks to eliminate government’s control over the volume of rice imports and to just allow market forces to come into play.

Under the plan, the government will slap a 35 percent on all rice bought from abroad instead of restricting rice import volumes. This would encourage private traders to bring the staple into the country, allowing cheaper rice to enter the domestic market.  This could immediately tame inflation, fiscal officials said.

Reduced rice prices would then benefit poor households, who spend at least 20 percent of their budget on rice.

Ang said funds raised from the 35 percent tariff could help support the farmers so they wouldn’t be displaced by cheaper imports.

He said they have grain terminals and facilities currently used for their feed mills, which can have extra silo to properly store imported rice, including unmilled rice.

These facilities are in various places including Batangas, Bataan, Davao, Cebu and Pangasinan.

SMC can import from Cambodia, Vietnam and Thailand and can enter into long-term supply contracts. Ang said they are also willing to help farmers by buying their produce.

“You have to satisfy the consumer and the rice farmers,” he said.

He said SMC is just waiting for the measure to be passed.

“If there are rules already, we can start importing palay and maintain its good quality,” Ang said.

He said the intention is to help ensure food security and help local farmers and supply consumers with reliable and good quality rice.

At present, the Philippines is facing tight rice supply, a situation that has been pushing prices upward.

In 2017, the average wholesale price of rice is P36.94 per kilo. This compares to the landed cost of rice variety from Vietnam and Thailand, which is P30.80 per kilo or a price difference of P6.14 per kilo.

Last year, the country produced 12.5 million tons of rice – the country’s highest production in history – as against the requirement of 13.1 million tons including for food, raw materials for processing of value-added products and other needs such as for poultry and other animals. – With Iris Gonzales