Philippines sees record dry season rice harvest

Posted at 05/03/11 4:38 PM

Q1 rice output may have reached more than 4 million tons

MANILA, Philippines - The country's rice harvest in the current dry crop season may touch record high levels due to early rains in the first quarter, putting less pressure on the government to import more of the staple, Agriculture Secretary Proceso Alcala said.

The government said last month it expects rice production to surpass a forecast of 7.6 million tons in the first half, which covers the dry crop period. It estimates total production this year to reach a record 17.46 million tons, more than 10% higher than last year's output.

"Our expected yield in the dry crop season is likely to be the highest in history," Alcala told reporters on Tuesday. He did not give specifics, but said harvests in the first quarter alone could possibly reach more than 4 million tons.

The last time the Philippines' rice output in the first half reached slightly more than 7 million tons was at least a decade ago.

Alcala also said the National Food Authority (NFA) council, which sets the country's rice import requirements, has confirmed this week the cap on Philippine rice buying at 860,000 tons, the current target for 2011.

"I don't see any reason," Alcala said when asked if the Philippines plans to buy more rice on top of its planned purchases.

The council previously set the maximum rice purchases this year at 1.3 million tons, but Alcala had said the country did not need as much rice.

The Philippines, the world's biggest rice buyer in recent years, has substantially cut its imports from last year's record 2.45 million tons, aided by expected better harvest this year and high buffer stocks from last year.

The grains agency, however, was seeking an additional 187,000 tons of rice imports under the Minimum Access Volume scheme to ensure food security, the head of the agency said last month. No council approval is required for the shipment to be made by private traders, and would be subject to a 40% tariff, unlike other approved imports which are tariff-free.

Benchmark Thai 100% B white rice was steady this week at a relatively firm level of $500 per ton. The price of 5%-broken grade rice, mostly sold to the Philippines and the Middle East, was at $475 per ton.

Rice prices were largely supported by fresh demand from Iraq, one of the world's top 10 rice buyers, traders said.

Exporters in Thailand, the world's biggest rice seller, were not surprised by news that the Philippines could produce record rice this year because the market had already factored in less imports from its Southeast Asian neighbor.

"The Philippines has already said clearly it would import less rice this year and it is trying to be self-sufficient in rice. The point is how well they can do (so)," said Chookiat Ophaswongse, a honorary president of the Thai Rice Exporters Association.

He said although Manila had bought most of its rice supplies from Thailand and Vietnam since early this year via government channels, Philippine private companies have also been buying rice from Thai exporters, reflecting firm demand.

"Around 200,000 tons of 5% broken grade white rice were sold to the Philippines during March and April in private deals," Chookiat said.


The Philippines has held two tenders in the past two months for rice import rights, allowing private traders to bring in the grain tariff-free. The state grain agency has so far awarded import rights for a total 454,848 tons.

It has also sought bids from private traders at a third tender to bring in additional 205,152 tons rice, the remainder of this year's rice import volume of 860,000 tons. It received offers for shipments totalling 306,298 tons rice, and is expected to award the import rights in two weeks.

The Philippines plans to further reduce its rice imports in 2012 and aims to become self sufficient by the end of 2013.

"As we lessen our rice imports, we will increase NFA buying of local harvests. We will be buying at least 10% of local produce when we become self-sufficient," Alcala said.

The NFA, which maintains a buffer stock of at least 30 days during lean harvest season beginning from July until September, currently buys about 3% to 4% of local harvests in a year.