MANILA (Dow Jones)--The Philippines will hold a tender April 17 to buy up to 500,000 metric tons of rice to boost local stocks amid surging prices and dwindling global supply, the National food Authority said Thursday.

  It will buy up to 400,000 tons of 25% broken variety, 50,000 tons of 15% broken and another 50,000 tons of 5% broken grain.

  Offers could hover near $1,000/ton, on a cost-and-freight basis, market participants said.

"A more realistic price range should be between $850-$950/ton, C&F. But I wouldn't be shocked to see a price offer of $1,000/ton," said a trader with an international trading house.

  The rice will be for shipment between April and June this year.

  The NFA has allocated PHP15.47 billion budget to buy the rice.

  Possible sources includes Thailand, Vietnam, China, Pakistan, Australia, United States, and India.

  The NFA increased the maximum volume that may be awarded to both government and private suppliers, traders noted, an indication that the country is desperately searching for rice imports.

  The NFA removed a ceiling of 400,000 tons of rice imports that government suppliers with good track records may sell to the agency.

  Rules for the auction showed that government suppliers without track records may now sell up to 150,000 tons from a previous ceiling of 50,000 tons.

  Private suppliers with good track records and without track records, may now supply 100,000 tons and 50,000 tons, respectively, from a previous ceiling of 50,000 and 25,000 tons.

  "They (NFA) aren't convinced they're going to get the supply from Vietnam," a trader noted.

  Vietnam signed a memorandum of agreement Wednesday where it committed to supply 1.5 million tons of rice to the Philippines this year.

  An official at a Bangkok-based exporting firm said the NFA is likely to receive limited offers at the auction amid dwindling export supply in most origins including Thailand, the world's largest shipper of the grain.

  "Thailand is practically the only remaining supplier in the market right now but Thai suppliers will be joining the tender in a limited way," the official said.

  He said only the Thai government is the only supplier capable of selling substantial amount of rice to the Philippines.

  "The government has about 2 million tons as rice reserves but they won't sell it because they have to think about domestic (food) security also," the official added.

  Philippine rice imports could reach a record high of 2.7 million tons this year. The NFA has so far signed contracts to buy 1.1 million tons of the grain.
 
 
  (END) Dow Jones Newswires