AgriNurture Inc. said Monday it signed a $1-billion deal with Vietnam Southern Food Corp. - Vinafood II for the importation of 2 million metric tons or 40 million bags of rice to stabilize supply in the Philippines.
AgriNurture, a listed food, and beverage company led by Antonio Tiu said in a disclosure to the stock exchange that the Vietnamese company agreed to exclusively export rice to the Philippines via the Bulacan-based firm.
Vinafood is a state-owned corporation duly designated and assigned by Vietnam’s government to export rice and to help achieve food security in Southeast Asia.
Under the memorandum of agreement signed by Tiu, who serves as president and chief executive of AgriNurture and Vinafood general director Nguyen Ngoc Nam, Vinafood would exclusively supply AgriNurture up to 2 million metric tons of long grain rice per year for importation to the Philippines.
“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 tariffication bill,” Agrinurture said in a statement.
The National Food Authority earlier granted an ‘original proponent status’ to AgriNurture for its unsolicited joint venture proposal to finance and purchase imported rice to beef up local stocks.
Under the proposed joint venture agreement, AgriNurture would finance the supply of NFA rice with no cash out on the part of government while both parties would determine the origin, suppliers, delivery and arrival periods, packing and loading and discharging ports.
The NFA, on the other hand, will specify the variety and quantity of the rice to be imported.
The importation will follow the existing rules on rice importation and will be subject to the measures of the proposed rice tarrification bill.
The bill was passed on third reading at the House of Representatives and is expected to get approval from the Senate this month.
The bill seeks to convert the quantitative restrictions on rice into tariffs to put in control the current runway inflation rate and stabilize the prices of available rice in the market.
Malacañang ordered the importation of two million sacks of rice which is expected to arrive within this months, 5 million sacks in October and another 5 million sacks in early 2019.
The NFA said rice consumption in 2018 may hit 14.4 million MT, against an estimated rice production of 12.6 million MT.
The balance of 1.8 million MT will be sourced through importation from neighboring rice-producing countries such as Vietnam and Thailand.
The government wanted to relax importation rules on important food items like rice, meat, fish, sugar, and vegetables to allow consumers greater access to nutrition and partly tame inflation rate.