Despite rice shortage, US can meet RP need

By Lito Katigbak
WASHINGTON = The strong demand for rice overseas as well as its tight
availability makes it also difficult for suppliers to meet the rice
demands of the Philippines, the USA Rice Federation said.
Jim Guinn, vice president for international promotion of USA Rice, said
the situation is not likely to improve until late July or August when
the new harvest season starts.
But Guinn gave assurance that the USA Rice Federation, an organization
of rice producers, millers and merchants, can meet the rice demands of
the Philippines.
“We will certainly try to do everything we can to help the Philippines,”
Guinn said.
US rice exports this year have soared by more than 20 percent over that
of last year, helped by strong overseas demand for the staple.
Guinn said the group is prepared to support more credit guarantees for
the Philippines from the USDA’s GSM program.
The program promotes sales of US farm goods to developing countries by
assuring lenders they will get paid even if a borrower defaults payment.
The Philippines used $75 million in GSM credit guarantees this year to
buy US rice but funds cannot be made available under the program since
the US farm law is set to expire.
Analysts here noted the increase of demand for rice from Manila.
“The balance of supply and demand is so finely tuned in the Philippines
that all you need is a bad typhoon in the coming months to tip the
country over the edge,” said an analyst with knowledge of the rice
situation in the Philippines.
‘The new harvest season in the Philippines begins in September and if we
can get there without suffering any devastating typhoon hits then we’ll
be okay,” he said.
US rice exporters believe there may be an easing of the worldwide
shortage of rice by the end of the year, but until then, prices are
expected to increase further.
Officials of the Philippine’s National Food Authority (NFA) were hear early this month to meet with suppliers for the importation of 100,000 metric tons of rice to Manila.
The NFA is using $75 million in credit guarantees from a US Department
of Agriculture program, which promotes sales of US farm goods to
developing countries by assuring lenders they will get paid even if a
borrower defaults.
NFA officials are in discussion with several US rice traders, hoping to
secure the best rates.
The negotiations between Philippine food officials and major American
rice suppliers are being made amid worldwide concerns over food security
issues which continue to drive up prices of the staple, the USDA said.

In its April circular on ?Grain: World Markets and Trade,? the USDA said
some major suppliers have banned or restricted exports in order to
protect domestic supplies, placing additional upward pressure on prices.

The cutback in exportable supplies resulted in record rice prices, as
indicated by Thailand and the US, the report said.

The USDA has increased the credit guarantee to the Philippines by $10
million in March to help it stave off a looming rice shortage.

In a broad review of the international rice situation, the USDA said
Vietnam, the world?s second-largest supplier, has re-imposed a ban on
exports that could cut shipments by at least 20 percent.

This would result in a million tons less than the previous year at 4.5
million metric tons.

China, on the other hand, placed a tax and quota system on exports while
Egypt banned exports from April 1 to October this year to help stabilize
high domestic prices, which have nearly doubled in recent months, it said.

India recently imposed an export ban on non-basmati rice to replace its
minimum export price, which has more than doubled to $1,000 per metric
ton since October 2007.

Although Thailand is not presently limiting or restricting exports, it
is faced with tightening domestic supplies and record prices.

Thailand is reportedly planning to release its own stocks into the
domestic market to help lower prices caused by the threat of falling
domestic supply which has been fueled by strong export sales, the report
said.

As for the US, its ending stocks are forecast at a 27-year low, but
there could be additional foreign demand for US rice.

The weakening dollar makes US commodities more competitive in the world
market and constrained shipments from traditional suppliers could cause
importers to increase purchases from the United States.

In Manila, Agriculture Secretary Arthur Yap urged Asian governments to
hold talks on the sharply escalating cost of food.

Yap proposed a ministerial-level meeting of Asian governments to discuss
means to raise food production and provide interim food aid.

“We must address the plight of food-poor families in the countries most
affected by the rice price crisis,” Yap told the International Rice
Research Institute (IRRI) during a recent meeting.

Sen. Manuel Roxas II also called on the government to take the
initiative in calling for a food summit among member nations of the
Association of Southeast Asian Nations (ASEAN), along with China, Japan
and South Korea.

Roxas, chairman of the Senate trade and commerce committee, made the
call as he noted the statement of the IRRI warning that the global rice
crisis is not expected to diminish until 2010 and may take from five to
10 years to finally settle down.

Popularity: 12% [?]