MANILA (Commodity Online) : World’s largest rice importer Philippines said it will buy more rice from global market to meet domestic shortage for the commodity.

Philippines’s National Food Authority (NFA) is coming back to the market for the second time in a month with a tender for 600,000 tons of rice in December, its largest ever single buy that could see prices spike.

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Philippines is securing stocks after storms damaged croplands in the main rice growing areas about a month ago.

NFA said it is seeking 600,000 tons of 25 per cent broken white rice at a tender on December 1. It is the first time the agency has tendered for a volume this big.

The grain is scheduled for arrival between February and May 2010.

Analysts said such a huge amount of rice should drive up the price globally. At the moment, the price could go up 5-10 per cent easily for any rice grade, they added.

The agency has set a budget of $325 million, or around $541 a ton, cost and freight, at current exchange rates.

NFA awarded two contracts on Friday for supply of a total 250,000 tons of the same rice grade to Vietnam’s Vinafood 2 and Korean trading firm Daewoo International Corp after a tender on Nov. 4.

The lowest bid at last week’s tender, submitted by Daewoo, was $468.50 a ton, C&F, well below NFA’s budget of around $536 a ton based on exchange rates at that time.

Prices for 25 per cent brokens have already gone up about 10 per cent since last week’s tender, and could spike further ahead of the December bidding.

For next month’s tender, NFA said source countries should be India, Thailand, Vietnam, China, Pakistan, Australia, and the United States.

Maximum volume from India, Pakistan, US and Australia will be 100,000 tons, and up to 600,000 tons from Vietnam, China and Thailand, the agency said.

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