MANILA - The Philippines will hold another tender for 600,000 tons of rice on Dec. 8, chalking out plans to purchase a record 1.2 million tons in a single week, as the world's largest buyer of the grain boosts supplies for 2010.

Some market players were surprised by Manila's announcement on Monday, which follows news of a 600,000-ton rice tender on Dec. 1, and asked why the country was rushing to buy the grain in the absence of any shortage now.

But buying at this time could give the Philippines a good deal since major exporters, such as Thailand, are holding huge stocks of rice, and India is not rushing to import, despite a poor monsoon.

The Philippine government could also be trying to lock down supplies before presidential elections next May.

If the next 2 tenders are successful, the Philippines will have bought 1.45 million tons of rice for 2010, already more than 80% of the total 1.775 million tons imported for this year.

"We feel that with 1.45 million tons, this will be a very comfortable level to start 2010 with," Ludovico Jarina, deputy administrator at state grain agency the National Food Authority, told reporters.

"We are filling up the gap, whether this is sufficient or not we don't know," Jarina said, when asked if more tenders were on the way.

Based on NFA's estimates, the country lost 1.3 million tons of paddy rice, equivalent to around 845,000 tons of milled rice, when strong typhoons devastated major rice-growing areas on the main island of Luzon in September/October.

Added to the 1.4 million tons that was the country's expected shortfall for 2010 before the storms hit, total rice imports for 2010 may reach 2.245 million tons, said NFA assistant administrator Jose Cordero.

"I'm not surprised, but I found it a bit strange why Filipinos are rushing to buy rice," said a trader with a global commodity firm in Singapore.

"The Philippines is putting fuel into the flame," the trader said, adding prices were most likely to spike with the twin tenders.

Manila's record rice imports of 2.3 million tons in 2008 helped drive grain prices to record levels.

Good time to buy

It was the first time the state grain agency has scheduled back-to-back rice tenders.

"I was taken aback. I was expecting NFA to make another tender but not so soon, and they're happening one week apart," said a Manila-based rice trader.

Vietnamese rice prices rose last week following a Philippine tender for 250,000 tons, for delivery between January and April, although the jump lacked momentum with no other aggressive buyer in the market besides Manila.

Vietnam secured the bulk of the volume with its prices lower than those offered by exporters from Thailand, the world's biggest rice shipper.

Another Singapore rice trader said Manila's plan was "not totally unexpected" and was unlikely to lift prices sharply amid bulging world stocks.

"There is no shortage of rice. The Thai government is sitting on a lot of rice and they are in the middle of harvesting a new crop," the trader said, adding that No. 2 rice exporter Vietnam had enough stocks as well.

"It's a good time to buy while prices are still soft," said NFA's Jarina, adding that the average offer at the Nov. 4 tender for 250,000 tons of 25% broken white rice was $530 a ton, C&F.

Bids for the next tender could start from $500 a ton, but prices are highly unlikely to breach $1,000 as in 2008, because of ample supplies, a Vietnamese trader at a foreign firm in Ho Chi Minh City said.

Romeo Jimenez, NFA director for marketing operations, said there was concern rice prices would climb, with traders expecting India, normally a major exporter, to buy as much as 3 million tons after bad weather ravaged its rice fields this year.

Jimenez told Reuters the Philippine government may also allow private firms to import 200,000 tons of rice next year.

Government-held rice stocks stand at around 1.1 million tons, good for 32 days of consumption, said Jarina, adding the goal was to start 2010 with at least a 30-day inventory.