Philippines negotiates to buy more Vietnamese rice, boost buffers

The Philippines is in talks to import more rice from Vietnam as it seeks to boost its buffer stock and lower domestic prices, a Philippine official says.

A Bloomberg report cites Domingo Panganiban, senior undersecretary of the Philippines Department of Agriculture, as saying that Vietnamese exporters have quoted prices that are as much as $40 per ton lower than private traders.

"This will hopefully pave the way for the country to get better terms for the additional 300,000 tons to 500,000 tons of rice importation for this year," Panganiban said.

This, in turn, can lower rice prices in the country as it will boost national inventory, which, even without the additional imports, is expected to last 52 to 57 days by the end of the year, he added.

Philippines President Ferdinand Marcos Jr. had said earlier this month that the Southeast Asian nation has sufficient rice stock to last even after the El Nino weather phenomenon ends next year.

The Philippines is one of the world’s biggest rice producers, but it also buys the staple from major suppliers like Thailand and Vietnam to help fill production gaps caused by typhoons and other disasters.

According to Vietnam’s General Department of Customs, Vietnam exported over 4.89 million tons of rice in the first seven months of the year for revenues of $2.62 billion, up 20.1% in volume and 31.4% in value year-on-year. The average price was $535/ton, an increase of 9.4% year-on-year.

During this period, the Philippines was the top rice consumer of Vietnamese rice, accounting for 39.6% of total volume and 37.6% of value. The country spent $985 million in the seven months on purchasing 1.94 million tons of rice from Vietnam, an increase of 6.5% in value and 2.1% in volume over the same period last year at an average price of $508.3/ton, up 8.8% year-on-year.

On August 4, Minister of Industry and Trade Nguyen Hong Dien, told a meeting in the Mekong Delta city of Can Tho that Vietnam, the world’s third-largest rice exporter after India and Thailand, is expected to ship abroad 7.5 million tons of rice this year while maintaining national food security. This is clearly higher than the 7.1 million tons of rice Vietnam exported last year.

The meeting was held as global rice prices continue to rise, and India last month ordered a halt to its largest rice export category to calm domestic prices, which climbed to multi-year highs in recent weeks as erratic weather threatens production.

Dien said domestic exporters need to speed up shipments but regulators must safeguard national food security.

Vietnam’s 2023 rice production is expected to reach 43.2 or 43.4 million tons, up 1.8-2% compared to last year, Tran Duy Dong, head of the Ministry of Industry and Trade's import-export department, told the meeting, citing the agriculture ministry.