Position of weakness

 With a looming El Niño drought threatening Philippine rice production in the last quarter of 2014 and the entire 2015, the National Food Authority (NFA) may find that it is negotiating from a position of weakness in shopping for imported rice.

Proof is that Vietnam and Thailand both offered to supply the Philippines with 750,000 metric tons of milled rice at prices above the NFA’s $426.83/MT price ceiling. The NFA has turned down the offers.

With both countries having standing supply agreements with the Philippines, Vietnam and Thailand will have until 3 p.m. today to submit revised offers, said an NFA official.

The big questions are: What happens when Vietnam and Thailand stick to prices unpalatable to the NFA?  Can the Philippines source rice from other countries to buoy up its stock of the staple cereal?

With global demand for rice in 2015 expected to rise, the Philippines may yet find it a sellers’ market for the grain and that it may have no choice but to bite the quoted prices of rice exporters.

Situations like these bring back the primordial issue why the Philippines could not increase local rice production by 10 percent so it could become 100 percent rice sufficient and not be at the pricing mercy of rice exporters.

The next administration’s job is cut out for it. It needs to double, no make it triple, government’s support for farmers. But first, it must cleanse and overhaul the Department of Agriculture (DA) to make it more responsive in boosting agricultural production. -end-

Image by Interaksyon