Dec. 14 (Bloomberg) -- The Philippines, the world’s biggest rice buyer, agreed to buy 509,950 metric tons of the grain as rising prices forced the country to take a lower volume than scheduled in a tender for next year’s supplies. The National Food Authority paid between $598 and $653 a ton from a Dec. 1 tender for 600,000 tons, spokesman Rex Estoperez said in Manila today. That’s 36 percent more than the maximum price the country paid in its first tender for 2010 supplies in November.

Prices have jumped as the Philippines accelerates imports to cover a widening production shortfall and on speculation that India, the second-largest grower, may become a net importer for the first time in two decades after drought damaged crops. Higher prices could spur inflation across Asia and Africa and stoke social unrest if the poorest are unable to afford food.

“As the Philippines continues to tap into the market, we could see the Thai rice price rising to around $700 to $800 a ton by the end of this year,” said Kiattisak Kanlayasirivat, director of Novel Commodities in Thailand, which trades rice worth around $600 million a year. “Other buyers have subsided from the market. It’s just the Philippines alone driving rice prices higher.”

The regional benchmark export price for Thai 100-percent grade-B white rice gained for a sixth week last week to $638 a ton, the highest since March. Rice futures traded in Chicago have surged 43 percent from this year’s low in March and last traded at $16 per 100 pounds, 6.5 cents below this year’s high.

‘Safe’ Inventories

The Philippines may buy less than 500,000 tons from another tender for 600,000 tons held Dec. 8 because of rising prices, Estoperez said today. Each tender has a fixed budget.

The food authority has been authorized to import 2.4 million tons for 2010, Jessup Navarro, the authority’s administrator, said in a statement today.

“We want to have a safe inventory level when the year starts,” Navarro said.

The supply contracts announced today, for delivery between January and May, were awarded to four traders. State-owned Vietnam Southern Food Corp. will supply 300,000 tons at $598 to $648 a ton and Louis Dreyfus Corp. will sell 100,000 tons at $599 a ton. Thailand’s Chaiyaporn Company Rice Ltd., the country’s third-biggest shipper, will supply 100,000 tons at $639.95 a ton and Asia Golden Rice Ltd., Thailand biggest exporter, will ship 9,950 tons at $653 a ton.

Vietnam Southern Food sold 150,000 tons to the Philippines at $480 a ton in the November tender.

The Philippines may import a record amount next year after storms destroyed an estimated 1.3 million tons of unmilled rice.

‘Worst Case’

Total imports next year may be a record 3 million tons in a “worst case scenario,” Estoperez said on Nov. 23. That’s more than 10 percent of next year’s global rice trade, estimated at 29.5 million tons according to the U.S. Department of Agriculture on Nov. 10.

Global rice production has lagged behind demand in four of the past eight years and rising consumption is expected to erode global stockpiles by 41 percent to 85.9 million tons in the 2009-2010 marketing year, down from a record 146.7 million tons in 2001-2002, according to the USDA.

The Thai price may soar to last year’s record of $1,038 a ton, according to the highest estimate in a November survey of 10 importers, exporters and analysts in Vietnam, Thailand, India, Singapore and Pakistan. The median estimate was $700 and the lowest $600.

To contact the reporters on this story: Cecilia Yap in Manila at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ; Supunnabul Suwannakij in Bangkok at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

Last Updated: December 14, 2009 04:35 EST