THE Philippine Department of Agriculture (DA) said it canceled the rice import permit covering a 12,480-metric ton (MT) shipment from Vietnam after a complaint that the cargo contained 25% broken-grain varieties instead of the 5% broken rice that had been contracted. Broken-grain content is a standard grading measure in the rice trade — the lower the share of fractured kernels, the higher the grade — and 25% represents five times the contracted level.

In a statement issued on Wednesday, Agriculture Secretary Francisco P. Tiu Laurel, Jr. said Planters Product, Inc. (PPI) filed the complaint, alleging that it had found lower-grade rice in the shipment after ordering 5% broken rice.

The permit was canceled several days before the vessel reached Philippine shores, after the DA received “derogatory” information about the shipment, which later attempted to leave the Port of Davao.

The cargo, aboard the MV Tay Son 2, was equivalent to roughly one-third of the Philippines’ daily rice requirement of 37,000 MT.

Mr. Laurel added that PPI notified him the shipment had been brought in past the July import window. The government typically times import arrivals for periods when supply is tight, in order to avoid depressing domestic rice prices during the harvest.

“The (sanitary and phytosanitary import clearance) indicated that the shipment was supposed to arrive in July, not September, when the wet-season harvest was about to begin, potentially putting downward pressure on palay (unmilled rice) prices,” the DA said.

According to the DA, without a valid import clearance the shipment cannot enter the country.

“Under DA rules, agricultural products brought into the country without a valid import permit may be seized and destroyed, ordered returned to the country of origin, or shipped to a third country to protect public health and safety,” it said.

The DA said the vessel arrived at the Port of Davao on Sept. 14, but its captain refused to submit the rice shipment for inspection by the Bureau of Plant Industry (BPI).

On Sept. 17, the vessel left Davao while the Bureau of Customs (BoC) was still determining how to handle the cargo.

“Upon learning of its departure, Mr. Laurel instructed the DA’s Inspectorate and Enforcement office to issue a hold order on the unloading of the cargo, alerting the BoC in case MV Tay Son 2 attempted to unload its shipment elsewhere in the country,” the DA said.

The Philippine Navy intercepted the vessel off Sarangani and brought it to the Port of General Santos City, the DA said, adding that the captain again refused to comply with the BPI’s inspection request. The vessel was then ordered to return to Davao. The episode drew in the DA’s enforcement arm, the BPI, the BoC and the Philippine Navy, spanning the sequence of clearances — sanitary and phytosanitary entry, plant-industry inspection and customs disposition — that imported rice must pass before it can enter the country.

The BPI had recommended returning the rice to its country of origin and was awaiting action by the BoC. The DA, for its part, recommended that the BoC seize the shipment and impose appropriate penalties. The decision now rests with the BoC, which under DA rules may send the cargo back to Vietnam, direct it to a third country, or order it seized.

— Beatriz Marie D. Cruz, BusinessWorld