LEGAZPI CITY—The auction of 94,000 bags of rice smuggled into this city’s port from Vietnam has been suspended after Customs Commissioner Ruffy Biazon found the floor price to be too low, according to Bureau of Customs officials here.
Leovigildo Dayoja, Legazpi district collector, said the auction was suspended after lawyers of the cooperatives that brought in the rice wrote a letter saying the floor price of P88 million for the shipment is too low.
Biazon gave the suspension order on May 14 after he was told that the floor price should be at least P94 million.
Mark Jon Palomar, lawyer for the cooperatives, said the floor price of P88 million was less than the shipment’s total landed cost of P138 million.
Palomar said the government would lose P30 million to P40 million if it offered the shipment at P88 million.
Dayoja said to resolve the issue on the floor price, Biazon requested the National Food Authority (NFA) to determine the correct floor price.
Biazon also asked the NFA to conduct thorough laboratory tests on the condition of the commodity to dispel rumors that the rice shipment was rotting.
The suspension also came amid reports that the notice of auction was “tailored fit” for one bidder.
Dayoja, however, said the bureau held a prebidding conference and only one was found to be qualified.
A customs source said the bidder was Purefeeds. The cooperatives involved in bringing the shipment in are automatically disqualified from the bidding.
Dayoja said the bureau had spent P3 million so far on the rice shipment, which was seized on Sept. 2 last year.
Danilo Lim, deputy customs commissioner for intelligence, in an inspection last March found that most of the consignees were “for hire” cooperatives being used by rice smuggling syndicates.
Lim said the agency had been closely checking areas considered as “high-risk” countries for smuggling such as Vietnam, India and Thailand.