Reuters

Private traders shunned the opportunity to import duty-free rice into the Philippines on Tuesday, put off by high international prices and competition from government-subsidized sales at home.

Only one trader sought to import 500 tons out of a maximum quota of 141,440 tons. The tender was meant to encourage more private sector purchases of rice to help boost national supplies at a time of soaring world prices.

The Philippine government, the world's biggest rice importer, has been hit hard by a near tripling of international prices this year. Manila sells the staple at a vastly discounted rate to millions of poor Filipinos.

The National Food Authority (NFA), the Philippines' grain importing arm, is trying to persuade neighboring rice producing nations to sell it grain in government-to-government deals.

The NFA said on Tuesday it may tender for more rice in the international market in December depending on whether local production in the final months of the year was sufficient to ensure a 15-day buffer stock.

"If there will be production from September to December we can source from the domestic market, the 15-day inventory," said Conrad Ibanez, the NFA's assistant administrator.

Rice prices have shot up this year after exporting countries introduced shipment curbs to cool domestic inflation. On Monday, Cambodia became the first major Asian exporter to lift its restrictions.

"Prices in the world market will only fall when countries with curbs open their market," said Ibanez.

The NFA will hold another tender for private traders for 200,000 tons of rice in June.

Private sector demand, however, is expected to remain muted due to the high cost and the difficulty of trying to compete against cheap NFA rice sold throughout the archipelago.

Importers on Tuesday were allowed to buy up to 76,940 tons from Thailand, 25,000 tons from India, 24,500 tons from China and 15,000 tons from Australia. Only one bid for 500 tons of five percent broken Thai rice was received and will be awarded.

The usual import tariff of 50 percent was waived but the government imposed a service fee. There was a price cap of $1,200 per ton cost and freight but the private importers were meant to settle prices themselves with overseas suppliers.

There will be no country quotas in the June tender.

Earlier this month, the NFA scrapped its own a tender to buy 675,000 tons of the grain, saying it wanted to wait until international prices drop.