FAO cited as source
I feel I owe the public and Jose Taganahan a speedy response. In “Why NFA’s imported rice is more expensive” (Inquirer, 4/3/12), Taganahan said he hoped that I should check “the veracity of my assertions and cited two factors to explain why National Food Authority’s (NFA) imports “are costlier than the benchmark price at any given time”:
1. Only (FOB-based) price benchmarks—Internet-based at that—for 25-percent brokens, are posted, while the FOBs for other rice grades (15-percent and 5-percent brokens) are not.
2. In buying all three rice grades, only one price is reflected in the NFA contract. Taganahan suggests that NFA import only the 25-percent brokens to lower the cost of rice.
Following his suggestion that I check the “veracity of my assertions,” may I present for consideration the following:
In our letter titled “Rice importation to favor Filipinos’ interest?” (Inquirer, 3/23/12), we noted NFA’s G2G procurements in June 2008, and in December 2008. The FOB benchmarks were not sourced from the Internet, but from the Trade and Markets Division of the Food and Agriculture Organization (FAO), Rome—June 2008, $759 for 25-percent brokens; $809 for 15-percent brokens; and $850 for 5-percent brokens; December 2008, $323 for 25-percent brokens; $350 for 15-percent brokens; and $415 for 5- percent brokens. The 25-percent brokens, priced cheaper than the 15-percent and 5-percent rice grades by $50-$100, accounted for nearly all of NFA shipments.
Take note of the contracted prices in 2008: $940 in June, and $550 in December. NFA-Grains Marketing is in a position to publish the mix, as the NFA website does not itemize rice arrivals by grades. Moreover, other Internet quotes do not make benchmarks less credible, but facilitate dissemination at no cost.
The NFA imported solely the 25-percent brokens on two highly publicized transactions. Back to back 2009 rice tenders sealed in Nov. 4, Dec. 1, Dec. 8,and Dec. 15, for a combined quantity of 2,275 metric tons, the shipments or deliveries to be done monthly for more than a year from December 2009, with an average contract price of $642; while the 2009 FOB benchmarks were $360 in October, $432 in November, and $448 in December.
The benchmarks in 2010 went from low $328 to high $451.
In March 2011, the NFA contracted 200,000 mt of 25-percent brokens at $480/mt on the same credit terms and rice grade at the average import cost $642 in December 2009. Again the benchmarks: $423 in March, and during deliveries $421 (April), $438 (May) and $430 (June).
Hasn’t President Aquino already addressed expensive NFA importation in March 2011?
—MANUEL Q. BONDAD,
