MANILA - The Philippines' state grain agency, the National Food Authority (NFA), said on Wednesday it had rejected all bids submitted in its tender to buy 500,000 tonnes of rice because they were higher than the government budget allowed.
The imports, targeted to arrive between September and November, were meant to beef up state stockpiles and bring down local retail prices of the grain, which have helped push food price inflation up to its highest in more than five years.
The NFA will likely hold another tender following Wednesday's rejected bids, after the agency's bidding committee reviews its budget, said its spokesman Rex Estoperez.
The government had set an undisclosed budget of $456.60 per tonne but bids ranged from $460 to $496.75 per tonne.
"Based on the non-responsive bids, we can declare a failure of bidding," Efren Sabong, head of the NFA bidding panel, told an audience of rice traders.
Four traders submitted bids at the tender, namely Vietnam's Vinafood 1 and Vinafood 2 and global commodities traders Louis Dreyfus and LG International.
A successful tender would bring the Philippines' total duty-free shipments this year to around 1.7 million tonnes, the biggest in four years. Additionally, the private can import 350,000 tonnes this year subject to a 40 percent tariff.
The Philippines expects to miss its rice output target of 19.07 million tonnes this year by 2 percent, based on the latest forecast by the Philippine Statistics Authority.
The latest forecast could be revised down if strong typhoons hit rice-producing provinces in the second half of the year and damage crops or prevent farmers from planting more.
With crop losses possible in the next four months, the government has also authorized the NFA to import 500,000 tonnes more for emergency needs, on top of the volumes tendered on Wednesday and in previous months.
Major rice exporters such as Vietnam and Thailand are looking for any signs the Philippines may need to import more, hoping to unload grain from their huge stockpiles.
With the Philippine rice imports this year possibly exceeding 2 million tonnes, the Southeast Asian country is on track to become the world's No.3 buyer as ranked by the United States Department of Agriculture (USDA), up from the No.8 spot last year.
The USDA has forecast that the Philippines may need to import as much as 1.6 million tonnes in 2015.
The Philippines has agreed to loosen tariff restrictions on rice imports starting next year under a new deal with the World Trade Organisation.