Manila scraps rice tender, prices seen falling

By Carmel Crimmins

MANILA (Reuters) - 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. Prices have trebled this year with world stocks at their lowest since the early 1980s and demand strong.

Anger over rising food prices has sparked protests from Haiti to Bangladesh. The latest violence erupted in Somalia on Monday, where a young man was shot and killed.

The Philippines, the world's top rice importer, said prices were on a downward trend and, after cancelling a tender for 675,000 tonnes, said it could wait until later this year, possibly the third quarter, to return to the market.

And in Spain, the chairman of Ebro Puleva, one of the world's biggest rice sellers, said rice prices could fall to as low as $600 a tonne next year.

Thai 100-percent B grade white rice , the world's benchmark, was trading at $990 a tonne on Monday after touching $1,000 on panic buying fuelled by export curbs by India and Vietnam.

"Next year it is likely we find a level of prices in Bangkok and India ... that could be in the range of $600 and $750," Ebro Puleva chairman Antonio Hernandez said. "I don't think current prices can be maintained much longer."

It was unclear however, what would be the impact on rice supplies of a devastating cyclone that ripped through Myanmar on Saturday. A diplomat briefed by Myanmar Foreign Minister Nyan Win told Reuters 10,000 people had been killed.