The Philippines, which will not be implementing a zero import tariff on rice next year under the region's free-trade agreement, Afta, has offered Thailand an import quota of 50,000 tonnes at the zero rate as compensation.

Manila's delay in implanting the zero tariff will cause difficulties for Thai rice exporters to the Philippines, which imposes a high import duty of 40 per cent.

Commerce Minister Porntiva Nakasai said the ministry had been informed by the Thai Trade Representative Office in Manila of the delay in implementing the zero rice tariff.

"Thailand has asked the Manila government to compensate by allocating 400,000 tonnes for Thai rice imports at the zero tariff. However, it has only allocated a small quota of 50,000 tonnes for Thai rice [at a zero rate] each year," Porntiva said.

She said the government had not yet accepted the Philippine government's proposal as it wants to consider what course of action would be most beneficial for rice exporters.

The Philippines is one of the world's largest rice importers with demand of about 2 million tonnes a year. However, the high import duties and strong competition from Vietnam, whose traders offer a cheaper selling price, have made exporting to the country difficult for Thais.

Under Afta, import duties on rice among members - except Malaysia, the Philippines and Indonesia - will be eliminated by

January 1. Rice is now subject to a 5-per-ent import duty. Thailand and other Asean members agreed in 1992 to liberalise trade in agricultural products, including rice.

The Philippines has categorised rice as a highly sensitive good, and committed to reduce its import duty from 40 per cent to 35 per cent by 2015. Malaysia will reduce its import tariff to 20 per cent next year, while Indonesia will cut its tariff to 25 per cent by 2015.

In addition, Thai exporters have urged the government to relax its regulations on releasing rice stockpiles under international bidding as a measure to reduce pressure on huge stockpiles.

Charoen Laothammatas, vice president of the Thai Rice Exporters Association, said the government should relax its conditions for participating in international bidding so that it can release more of its stockpile.

The Philippines will soon open bidding to import more rice, due to the impact of its heavy monsoon season. The Thai government has not given full authority to officials to participate in the bidding. This means they cannot make an immediate decision on whether to compete with other bidders, Charoen said.

Charoen said the Philippines had imported about 1.8 million tonnes of rice this year, mainly from Vietnam.

Although Thailand is the world's largest rice exporter, the complicated conditions under which Thai officials can participate in bidding has hurt exporters' competitiveness, he said.

Source: The Nation