By Madelaine B. Miraflor

Publicly-listed firm AgriNurture Inc. (ANI) has signed an exclusive deal with Vietnam Southern Food Corporation (VINAFOOD II) for its importation of as much as 2 million MT of rice worth $1 billion.

“The terms and conditions of the exclusive supply agreement shall be finalized in accordance with applicable Philippine laws including, but not limited to, the proposed rice tarrification bill,” ANI said in a disclosure at the Philippine Stock Exchange.

VINAFOOD II was one of the companies that failed to secure a supply contract from the last government-to-private (G2P) bidding that the National Food Authority (NFA) conducted in May for the importation of 250,000 metric tons (MT) of rice. VINAFOOD II is a state-owned corporation, duly designated and assigned by the government of Vietnam to export rice and help achieve food security in Southeast Asia.

Last month ANI submitted an unsolicited proposal to the NFA for its plan to import 500,000 MT of rice in behalf of the Philippine government.

And although the company said the proposal was acknowledged by NFA, the agency is yet to make any decision regarding the plan.

NFA Grains and Marketing Chief Rocky Valdez pointed out that though he has no direct knowledge of the deal, this will be subject to the approval of the NFA Council, the highest policy making body of the state run grains agency.

Under the proposed joint venture agreement, the ANI consortium shall finance the supply of NFA rice with no cash out on the part of government.

Both parties shall jointly determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports. NFA, on the other hand, will solely determine the type of commodity to be imported, specifications and quantity.

Under its mandate, NFA is required to ensure national food security and to stabilize supply and prices of staple cereals like rice both in the farm and consumer levels.

At any given time, the agency is required to maintain a rice buffer stock good for 15 days, and good for 30 days during lean months.

Since the Philippine daily rice requirement is estimated at 32,750 metric tons, ANI’s 500,000 metric ton importation is just enough to fill NFA’s 15-day requirement.

The government is moving towards the liberalizing rice importation to stabilize supply and prices. Once amended Agricultural Tariffication Act, or the rice tariffication bill, will be passed into law, rice importation will be allowed to enter the Philippines with a corresponding tariff of 35 percent.