Philippines calls off rice auction after Vietnam withdraws
Source: 07-MAY-2008 Intellasia | Mcot
May 7, 2008 - 7:00:00 AM The Philippine government has cancelled the current round of bidding to import 500,000 tonnes of rice following Vietnam's withdrawal.

Thai Rice Exporters' Association president Chukiat Opaswong said he received reports that the Philippines had no choice but to call off the bidding on Monday because no country had submitted a bid.

Vietnam, considered the strongest contender to clinch the deal to sell rice to the Philippine government, notified Manila that it was "not prepared" to take part in the bidding.

According to Chukiat, Vietnam's move was a surprise to the rice traders' circle.

However, analysts including Chukiat himself believed that Vietnam withdrew because it wanted to slow exports in the face of surging prices in its domestic market.

One main implication from the bid not materialising is that it temporarily puts a stop to the continued rise of rice prices on the world market.

Chukiat said no Thai rice exporting company took part in the bidding because one condition attached calls for bidders to provide a government's guarantee. However, Thai law forbids the government to provide export guarantee to private companies.

The rice traders president urged the Thai government to consider flexible measures to make it possible for Thai rice exporters to compete.

He said the 10% fall in rice prices in recent days reflected market adjustments, following an unprecedented 245% surge in the last three months.