Philippines, Cambodia in rice talks

October 31, 2010
Reuters

CAMBODIA has offered to sell rice to Manila as it faces a supply surplus, but talks are only exploratory and no deal has been reached yet, the head of the Philippines state grain agency said on Friday.

Angelito T. Banayo, administrator of the National Food Authority (NFA), said in an interview that Cambodia has a surplus of 1-1.2 million metric tons (MT) of paddy rice which it can sell.

He had met Sok Siphana, advisor to the Royal Government of Cambodia, on Thursday to discuss food security issues.

Mr. Banayo said the Philippines, the world’s biggest rice buyer, was open to purchasing the grain from its Southeast Asian neighbor, but clarified that a deal was some way off.

"The reason for their coming over was basically to find out what are the demands of importing countries such as us. It’s basically exploratory," Mr. Banayo said.

Mr. Siphana said in a later interview that his mission in the Philippines was to explore options and work out the how his country could start exporting large quantities of rice.

"We want to export everything we can but we are also mindful of the fact that we are the new kid on the block," said Mr. Siphana.

"We want to start slowly and tread carefully because our traders are not used to the international trading system, so we want to start with smaller quantities, especially in ASEAN," he added.

He said his government would prepare a formal draft of a memorandum of understanding with the Philippines on rice supply, with the document possibly signed within the year.

Cambodia, which is trying to develop its rice export sector, has offered to sell at least 100,000 MT per year to the Philippines, another state official said, but details still needed to be worked out.

"We will not be able to export in this number right away, but we will start with what we have," Mao Thura, secretary of state of Cambodia's Commerce Ministry, said, adding that state-owned rice exporting firm Green Trade Company would be the shipper.

Green Trade Director General Thon Virak said Cambodia had suggested it could export 200,000 MT, adding that while details were still being worked out, there was already approval from the Philippine government.

The Philippines, which imported a record 2.45 million MT of the commodity for this year, usually buys the grain from Vietnam and Thailand.

A strong typhoon two weeks ago was estimated to have brought minimal damage to rice crops in northern Philippines and officials said there was no need for more imports this year. Mr. Banayo said that, based on his agency’s survey, a total of 257,653 MT of unmilled rice were lost due to Typhoon Megi, less than half an estimate by the Department of Agriculture as of Thursday.

But he added that the Philippines was not in a rush to buy rice for its 2011 needs.

The government will decide in November or December the volume it will import for next year, but he said the final amount would probably no more than 1 million MT, with the purchases in small tranches.

"I can afford to wait until prices go down. If prices begin to soften, then I might buy," he said.