Rice Sale Off in Sign of Price Relief

MANILA, Philippines -- 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 tripled 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 that 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, the state's grain importing arm.

The Philippines, the world's top rice importer, said prices were on a downward trend and said it could wait until later this year to return to the market.

Meanwhile, central bankers meeting in Basel, Switzerland, said Monday that food price inflation might be one of the most serious problems facing the world but one that monetary policy has little power to tackle. With the price of food rising by more than 40 percent a year, the issue is high on the agenda at meetings of the Bank for International Settlements, which began on Sunday.

"Food pressure is a global problem, we have to observe, monitor, but we cannot use monetary policy tools to manage this problem," said Polish central bank chief Slawomir Skrzypek. "Food pressures could be one of the most serious problems that we have to face now."

"It's certainly going to be one of the big issues here," Israeli central bank head Stanley Fischer said.