Vietnam wins 175,000-ton rice bids in the Philippines

Illustrative image (Source: Internet)

Prices, however, at less than ceiling.

Vietnam has won a bid for 175,000 tons of rice at various prices after the Philippines’ National Food Authority (NFA) opened a tender package for 250,000 tons of 25 per cent broken rice on July 25.

NFA adopted a free tender. If the new bidding mechanism continues to be implemented, there will be many changes for Vietnam’s rice exports in the future.

Nine Vietnamese enterprises took part in the bid but only four won contracts, for a total of 175,000 tons of rice.

Two issues emerged from the auction. Firstly, the winning price was quite low compared to NFA’s ceiling price of $451.08 per a ton. Secondly, it reflected the international procurement capacity of Vietnamese enterprises.

Mr. Truong Thanh Phong, Adviser at Golden Resources Development International. Ltd. H.K, said that the price of Vietnamese 25 per cent broken rice now fluctuates from $370-$380 per ton, higher than Thailand’s $365-$370 per ton.

“Although Vietnamese enterprises won the bid with different prices, overall these prices are lower compared to the ceiling price of $451.08 per ton the NFA gave,” he said. “This is a good price for the buyer.”

Vietnam exported nearly 2.66 million tons of rice in the first half of this year, with a free-on-board value of $1.65 billion, the Vietnam Food Association reported. The figures were up 0.25 per cent in volume and 1.85 per cent in value. 

The country targets exporting 4 million tons of rice by 2030, under the Development Strategy of Rice Export Markets in 2017-2020 and Vision to 2030 approved recently by the Prime Minister.

The winning of bids for 175,000 tons of rice will help stabilize the domestic rice market and provide the basis for Vietnamese companies to continue participating in upcoming auctions in the Philippines. From now to the end of the year, Vietnamese rice may therefore see more favorable output.