Vietnamese exporters tabled an offer of $424.85 per ton to secure contracts to supply 150,000 tons of rice to the Philippines.

1 September 2016 | Vietnamese exporters have undercut their rivals with an offer of $424.85 per ton to secure contracts to supply 150,000 tons of rice to the Philippines. Last month the Philippines opened up bidding for 250,000 tons of the grain, mostly 25 percent broken rice. Thai traders have managed to secure contracts for the remaining 100,000 tons that will be shipped over the next two months.

Vietnam’s offer beat other traders and exporters from Thailand and Cambodia. The National Food Authority (NFA), the Philippines’ state grain agency, plans to import 1 million tons of the staple to fill stockpiles for 2017. The NFA said it buy a further 750,000 tons of well-milled long-grain white rice through government-to-government deals to build up stocks to ensure food security.

Countries with existing supply agreements with the Philippines such as Thailand, Vietnam and Cambodia are qualified to submit offers. The fresh demand from the Philippines is expected to boost global export prices, which have fallen to multi-month lows.

Weak demand and rising supplies have dragged Vietnam’s rice export prices down in the second half of this year. From January to August, Vietnam’s rice exports fell 16.6 percent from the same period last year to 3.37 million tons, according to date released by the Agriculture Ministry.

The Philippines, one of the world’s biggest rice buyers, annually imports about 1 million tons of the staple grain, or even higher, in order to bolster stockpiles that can be severely depleted by adverse weather conditions and natural calamities.

The Philippines is hit by an average of about 20 typhoons each year, mostly during the second half of the year.

In 2010, the Southeast Asian country bought a record 2.45 million tons, according to data compiled by Thomson Reuters.