Typhoon seen raising Philippines’ need for rice imports

ASIA - The massive typhoon that ravaged central Philippines on Friday laid waste an important rice growing area and is likely to raise the need for extra imports, officials and traders said.

The typhoon is estimated to have killed 10,000 people and displaced more than 600,000, with rescue workers still struggling to reach stricken towns and villages on Monday.

Around a quarter of the Philippines' rice is cultivated in areas hit by the typhoon, but farmers had finished harvesting most of the crop, a National Food Authority official told Reuters.

Dennis Arpia, senior executive assistant at the NFA, reckoned that some 16,000 bags (800 tonnes) of rice had been damaged, mainly in Leyte province, but he gave no estimate for the scale of damage to the standing crop.

Increased imports by the Philippines could underpin rice prices, which have been held down by Thailand's record high stocks.

Before the typhoon struck, the market had been estimating the Philippines' rice imports would rise to around 1.5 million tonnes in 2013/14 due to demand outstripping slowing growth in domestic production, but traders now see it needing more.

"Not only will they need to cover for whatever has been lost in the typhoon, they will need more rice for distribution in the affected areas," said one Singapore-based rice trader with an international trading company.

Arpia said, however, that there were stocks elsewhere in the Philippines that could be sent to the disaster-hit region.

"We have more than enough stocks in other provinces to meet the needs of the provinces hit hard by the typhoon," Arpia said.

Though it had been the world's biggest rice buyer as recently as 2010, the Philippines' drive for self-sufficiency had reduced imports to 1 million tonnes in 2012/13, according to the US Department of Agriculture data.

While Manila is likely to buy most of its rice from Vietnam, this could present a chance for Thailand to whittle down record high stocks of around 15-16 million tonnes through government-to-government deals.

The price for common grade 5-per cent broken Thai white rice RI-THBKN5-P1 slid to US$410 (S$513) per tonne late last month, matching the lowest level since July, 2010.

LESS NEED FOR SUGAR IMPORTS

Sugar output will have been hit less hard by the typhoon, and officials doubted whether imports would be needed. The Philippines has been self-sufficient in sugar for the last three years.

Cane-growing areas hit by the typhoon produce up to six per cent or 150,000 tonnes of raw sugar, according to the head of the country's sugar regulatory agency.

"Right now, I don't see any need for importation," said Regina Bautista-Martin, chief of Manila's Sugar Regulatory Administration. "We're of course looking at a drop, but I cannot yet quantify the amount of drop."

Bautista-Martin said Philippine raw sugar production for the 2013/14 crop year will likely be below the agency's earlier forecast of 2.45 million tonnes, but will still be sufficient to serve the domestic market of around 2.1 million tonnes.

Front-month raw sugar futures has fallen more than 10 per cent since hitting a one-year high around 20 US cents a pound on Oct. 18 on supply worries after a fire at warehouses in Brazil.