The Philippines scrapped its largest rice tender of the year on Monday and said it preferred to hold back importing until prices fall, sending a signal to world grain markets that rice prices might have peaked.
Manila's willingness to wait could give some breathing space to importers scrambling for cargoes in recent weeks. Prices have trebled this year with world stocks at decades lows and demand strong.
Leaders attending the annual meeting of the Asian Development Bank in Madrid warned on Sunday the region was at risk of undoing a decade of gains because of soaring food prices that could also spark social unrest.
"We feel that we are not pressured to buy now," said Ludovico Jarina, deputy administrator of Manila's National Food Authority, (NFA), the state's grain importing arm.
The Philippines, the world's top rice importer, said prices were on a downward trend and, after cancelling a tender for 675,000 tonnes of the grain, said it could wait until later this year, possibly the third quarter, to return to the market.
Jarina officially declared Monday's eagerly-awaited tender a failure after Vietnam's state-owned Vinafood II, the sole participant, failed to supply a bank guarantee.
After consistently failing to secure the asked-for volume in recent tenders with private dealers, the Philippines was trying this week to deal exclusively with state firms and traders with government guarantees.
The NFA, which keeps the price of rice artificially low at home to feed millions of poor Filipinos, has insisted it has enough supply for a lean period in the third quarter, but dealers doubted Manila would be able to defer imports for long.
"They keep saying they have enough rice for the third quarter but today's tender was meant to be for delivery for May and June," said one dealer, who declined to be identified.
FOOD PRICE SPIRAL
Thai 100-percent B grade white rice, the world's benchmark, is currently trading around $990 a tonne, down from a peak of $1,000 a tonne late last month. U.S. rice futures fell over 1 percent on Monday after hitting all-time highs recently.
"Today should have been a price-setting day but that did not happen," said a trader. "I think people will just sit back and wait."
