The Philippines scrapped its largest rice tender of the year today 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 yesterday 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.
Mr Jarina officially declared today'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.