Govt may call global tender for rice, wheat supplies

KATHMANDU, Aug 28: Nepal Food Corporation (NFC) is planning to call an international tender to procure 250,000 quintals of rice as rice on offer from the Indian government was found not to be of desired quality.



This is the first time in 10 years that the government is preparing to procure rice from the international market to boost NFC´s rice stocks, fend off any possible food shortage and intervene in the market. [break]



“Initially, we were trying to procure rice from Indian government stocks. However, we dropped the idea because the quality of the Indian rice didn´t meet the standards in Nepal,” said Bijay Dhwaj Thapa, deputy general manager of NFC.



NFC had initially planned to buy rice from the Mineral and Metal Trading Corporation (MMTC)- an undertaking of the Indian government.



Thapa said Sona Mansuli available in India has more than 45 percent broken limit (quantity of broken rice grains), which is in excess of the upper limit. Sona Mansuli is the most popular rice variety among the lower and middle classes.



In response to a request by the Nepal government, India has agreed to supply 250,000 quintals of rice, 500,000 quintals of wheat and 200,000 quintals sugar to Nepal.



NFC-- the state-own food supplier--has been compelled to procure rice from other than domestic sources as local suppliers have shown only nominal interest in supplying the staple despite repeated tender calls across the country.



“We are importing rice from the international market for the first time since 2000 to maintain sufficient stocks as we got a cold response from domestic suppliers,” Thapa added.



NFC has failed to buy rice from local markets as most suppliers opted out of the tender process, speculating that the price would go up in coming months.



Those who failed to supply rice as per agreement have had to forfeit their tender deposits. NFC has, however, procured rice from Dhangadhi, Bhairawa, Birgunj, Lahan, Biratnagar and Tulsipur.



Traders mainly in Janakpur, Birtamod and Biratnagar violated their agreements and did not show up to sell rice.



Some of the suppliers, who were ready to provide the rice, have raised the price by 15 to 18 percent, taking advantage of a shortage in the market.



Decline in the production of rice in the country by 11 percent last year has worsened the supply situation which has already been affected by the restriction on rice exports to Nepal by the southern neighbor for more than two years.



NFC has set itself a target this year of supplying 110,000 quintals of different varieties of rice such as Sona Mansuli, coarse, Jeera Masino and Sawa Mansuli to 23 food deficit districts, mainly in the hills of the Mid and Far-western regions.



Meanwhile, the Salt Trading Corporation (STC)--the state-owned distributor-- is preparing to procure 500,000 quintals of wheat from the Food Corporation of India (FCI), but the process has not sped up as the price of FCI wheat is far higher than the prevailing price in the Nepali market.



“We have requested India to supply us wheat at a price which wouldn´t be higher than the price in our domestic market,” Urmila Shrestha, general manager of STC, told myrepublica.com.



She said STC would opt for a global tender if FCI fails to provide wheat at a reasonable price.

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