Philippines May Hold Series of Rice Tenders This Year

The Philippines, the world’s top rice importer, may hold a series of tenders for the staple by yearend after two storms hurt crops, and warned that a third supertyphoon now churning off the nation may cut output further.

Supertyphoon Lupit, due this week, may “affect” harvests, National Food Authority Deputy Administrator Vic Jarina told reporters in Manila. Agriculture Secretary Arthur Yap had said Oct. 14 that a second rice tender may be needed by yearend because of the damage, on top of one initially set for Oct. 30.

Increased Philippine purchases may boost global demand, driving prices higher. Futures in Chicago gained as much as 2.8 percent on the day of Yap’s comments, and reversed losses to advance today. Rice is the staple food for billions in Asia.

The potential increase in Philippine imports may boost prices, Chookiat Ophaswongse, president of the Thai Rice Exporters’ Association, said today. Still, given that the Thai government has “ample” stockpiles of about 6 million tons, buyers are unlikely to panic, Chookiat said by phone.

Rice for November delivery gained 0.3 percent to $13.69 per 100 pounds on the Chicago Board of Trade at 4:08 p.m. in Manila, reversing a loss of as much as 0.5 percent. The contract rose to the highest price since January after Yap’s Oct. 14 remarks.

Philippine rice supplies are sufficient for this year, Jarina said. The 250,000 metric ton tender initially set for Oct. 30 -- the earliest tender planned for next-year supplies -- was delayed till Nov. 4 after suppliers cited a scheduling conflict with a conference, Jarina said.

Food Inflation

Rice jumped to a record last year after the Philippines boosted purchases and some exporters curbed shipments amid concern that there may be a global shortage. Corn and wheat also touched all-time highs in 2008, pushing food inflation higher and sparking unrest in nations including Haiti and Egypt.

If Lupit “hits rice-producing provinces, it will affect output,” said Jarina. “That’s why we’re waiting for the assessment on how much the shortage will be.” He added: “Depending on the result of the assessment, we’re going to most likely buy again. That should be before the end of the year.”

Supertyphoon Lupit was 1,158 kilometers (719 miles) east- northeast of Palanan on Luzon island at 2 p.m. local time, according to the U.S. Navy Joint Typhoon Warning Center. Philippines authorities are planning evacuations should the storm approach the country.

Lupit weakened slightly today to a Category 4 storm, the second strongest on the Saffir-Simpson scale of cyclone strength. Such storms have winds of 210 kph to 249 kph and are capable of “devastating damage,” according to the U.S. National Hurricane Center.

Tropical Storm Ketsana struck the Philippines’s largest rice-growing region on Sept. 26, followed by Typhoon Parma, which hit parts of Luzon on Oct. 3.

The Philippine Department of Agriculture estimated Oct. 13 that losses to rice output from Parma and Ketsana may be 13 percent of the 6.5 million ton fourth-quarter forecast. That equates to about 545,550 tons of milled rice, according to Bloomberg calculations based on average recovery rates.