The new government of the Philippines faced another critical challenge: to provide sufficient amount of rice to more than 100 million population of the country.

Rice harvest in the Philippines is suffering from growing losses from the drought, as major Asian suppliers of rice in the country suffer from climate model El niño.

In a country where rice makes up about a quarter of the spending of poor people, any disruption of supply were an extreme problem. Large purchases of the world's third largest importer can also put shock waves through the markets.

There are fears that vital imports may be delayed, as the new government Rodrigo duterte plans to change the policy and revise existing plans of public procurement.

Now is the right time to import, as prices begin to rise, said the leadership of the International research rice Institute (IRRI).

In 2008, the decrease in rice production in Asia also due to El niño forced India to ban the export, and the Philippines have introduced panic measures including the orders to the troops to control the sale of subsidized rice and calls to reduce by half servings of fast food.

Manila also had to import more rice in 2014 after prices rose due to crop damage from a Typhoon.

In mid-may, the government reported that April's plan to allow the state of the company, the purchaser, to import extra 500,000 tons this year will be revised, and negotiations with Vietnam, Thailand and Cambodia on new agreements.

Goal is to make the country self-sufficient in rice within one to two years, but still allow import, until this is achieved.

Many traders were expecting that the Philippines will make a great 500 000-tonne purchase soon after obtaining permission, but no transactions have not been concluded, and it really adds some intrigue to the market, said economists at the International grains Council in London.

Representatives of the National office for food reported that there is no urgent need to import rice, given the abundant reserves. Stocks in April would be enough for 99 days of consumption.

However, there are fears that the time for this agreement ends, to protect stocks in a poor harvest season that starts in July, as the new government officially takes office until the end of June.

If by the end of June, the country will not purchase the rice, there will be problems with the proposal, said the Singapore trader.

Source: Thomson Reuters