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UPDATE 1-Typhoons could force Philippines to import 2 mln T of rice next yr

Erik dela Cruz and Naveen Thukral
Thursday, 28 Nov 2013 | 5:05 AM ET

* Rice imports of 2 mln T would mark largest in 4 yrs

* Vietnam, Thailand likely to compete to offer extra rice

* Super typhoon Haiyan devastated central Philippines on Nov. 8

* Minister says still aiming for self sufficiency

(Adds comments from farm minister)

MANILA/SINGAPORE, Nov 28 (Reuters) - The Philippines, one of the world's top rice consumers, may need to import as much as 2 million tonnes of the grain in 2014 as it looks set to miss self-sufficiency targets following two strong typhoons, traders and farming experts said.

That would mark the largest rice imports in four years by the Southeast Asian country, the world's biggest buyer in 2010, when it purchased a national record of 2.45 million tonnes.

Higher demand from the Philippines is unlikely to have a huge impact on global rice prices as world production is forecast to exceed consumption next year.

But Vietnam, traditionally the country's main supplier, and Thailand, which is sitting on record-high stocks, are expected to duke it out in bidding to supply Manila.

Just last month, Philippine farm officials were still optimistic about rice production, announcing an estimated 2.2 million tonnes of year-end inventory that would have helped limit imports in line with the country's goal of becoming self-sufficient in rice by 2014.

But this week it had to seek bids from three neighbours, Vietnam, Thailand and Cambodia, for the emergency supply of 500,000 tonnes to boost government stocks depleted by relief work after Super Typhoon Haiyan devastated the central Philippines on Nov. 8.

Vietnam, the world's second-biggest rice exporter after India last year, bagged the government-to-government deal after offering the lowest price at a tender on Tuesday.

Prices of Vietnamese rice rose on Wednesday, with 5-percent broken rice nearing a one-year peak.

The Philippines is keeping the door open for more imports while awaiting the harvest from the first-quarter crop of 2014, state grains agency the National Food Authority (NFA) says.

NFA Administrator Orlan Calayag remains hopeful imports will be minimal next year. But he said the private sector would be allowed to bring in as much as 350,000 tonnes of rice in 2014, with a duty of 40 percent under a commitment to the World Trade Organisation.

Agriculture Secretary Proceso Alcala said the government had yet to estimate how much more rice may have to be imported next year.

But he said 2 million tonnes would be "too much", considering that some farmers hit by the typhoons have replanted, aided by the Department of Agriculture.

"That (import requirement) will be evaluated early next year," he told Reuters. "We will miss our targets and will have to make some adjustments, but we are still aiming for self-sufficiency."

Total imports approved this year by the NFA have hit 705,000 tonnes, including the latest emergency buy. Before Haiyan, the Philippines had aimed to limit 2013 imports to 350,000 tonnes.

FARM INFRASTRUCTURE A CONCERN

Traders and farm experts expect Philippine rice imports next year to range from 700,000 tonnes to 2 million tonnes.

"We are looking at anything between 1.5 to 2.0 million tonnes of imports in 2014, but it is hard to put a number on it just yet," said a Bangkok-based trader.

"They will definitely need more rice after the typhoon damage," the trader added. "The World Food Programme is coming up with a tender to supply rice as aid to the Philippines."

The WFP said it had reached agreement with the NFA to provide 10,000 tonnes of rice for Haiyan relief operations.

The United Nations' Food and Agriculture Organisation (FAO) has predicted Philippine rice imports next year at 1.2 million tonnes, revising an earlier forecast of 900,000 tonnes.

The Philippines-based International Rice Research Institute, which helped the Department of Agriculture assess crop losses, said damage to farm infrastructure was a bigger concern.

"The most serious issues will arise from extensive losses resulting from the storm surge - in farm machinery, storage, housing and damage to roads and irrigation," said Bruce Tolentino, an IRRI official.

It is far too early to put a figure on the Philippines' rice imports next year, a London-based trader said.

"We will know more about their import requirements in 2014 by the end of December when the planting is over and we have some idea about the crop."

SELF-SUFFICIENCY FAILURE

The Philippines' paddy rice output in the entire year is likely to be below a government forecast of 18.58 million tonnes, made before Haiyan struck.

That prediction was already 9 percent lower than the government's target of 20.4 million tonnes set under its rice self-sufficiency programme.

Because of Haiyan and Typhoon Nari, which hit major northern rice-producing regions in October, the FAO cut its 2013 aggregate forecast of rice paddy output - including the main 2013 season and the 2013/14 secondary season - to 18 million tonnes from previous estimates of a bumper crop of 18.9 million.

The Rome-based FAO expects world rice production in 2013/14 to rise 0.9 percent to 494.1 million tonnes. Total consumption is seen up 2.6 percent, at 489.0 million.

On Wednesday, the FAO said more than $11 million was needed to help clean and clear farmland and irrigation canals after Haiyan, which killed 5,500 people, the government estimates.

That is in addition to the $20 million already sought to help farmers fertilise, irrigate and maintain crops to ensure harvests in 2014.

"We were previously projecting a 4 to 5 percent growth in production, but now it looks like it is flat for this year," said economist Roehlano Briones of the government think-tank Philippine Institute for Development Studies.

"So we're way off the projection while our population continues to grow."

He said a 2-million-tonnes volume was a reasonable estimate for the maximum import requirement next year, especially for a country visited by an average of about 20 typhoons each year.

To plug the looming deficit, he said the Philippines should initially import at least 800,000 tonnes.

Missed production targets and typhoons that have become stronger should prompt the government to abandon hopes for self-sufficiency in rice, he said.

"There's no shame in withdrawing from an unrealistic policy. The government must have a more liberal policy on rice importation," he said.

(Additional reporting by Ho Binh Minh in Hanoi; Editing by Joseph Radford)