Vietnamese Firms Secure Rice Contracts in Indonesia
Published on: February 7, 2024.
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Indonesia to Import 3 Million Tonnes of Rice in 2024, Becoming Key Customer for Vietnamese Rice Industry
Indonesia is set to import around 3 million tonnes of rice in line with their 2024 plan, making them one of the largest rice importers in the world. This import quantity is almost equivalent to the planned rice imports of the Philippines from Vietnam. The Indonesian National Logistics Agency (Perusahaan Umum BULOG) launched a tender in January to import 500,000 tonnes of rice to boost the country’s food reserves.
The bidding process was completed by BULOG on January 30, with Vietnam winning eight out of the 17 packages distributed among five companies. Three major Vietnamese companies, including Loc Troi Group Joint Stock Company (LTG), Northern Food Corporation (Vinafood 1), and Southern Food Corporation (Vinafood 2), secured two lots each. Kien Giang Import-Export Joint Stock Company and Phat Tai Food Limited Company also won lots, along with Singaporean trading company R&S Trader PTE.
With this successful bidding, Vietnam emerged as the only country with multiple companies participating and securing substantial quantities of rice. Meanwhile, Vietnam’s rice export market to Indonesia has surpassed China, becoming its second-largest rice export market. In 2023, Vietnam exported 1.16 million tonnes of rice to Indonesia, totaling 640 million USD, which is a significant increase of 877-992% compared to the previous year.
The Vietnam Food Association (VFA) reported that the export prices of Vietnamese rice saw a slight decrease of about 11 USD/tonne compared to the end of 2023. As of late January 2024, the export price of standard 5% broken rice is 642 USD/tonne. Vietnam’s 5% broken rice is currently priced around 13 USD/tonne lower compared to Thailand’s equivalent grade. In comparison to Pakistan, Vietnam’s 5% broken rice is approximately 4 USD/tonne higher.
Industry insiders believe that the current export prices of Vietnamese rice are not high due to limited available stock. Transactions are expected to resume at the end of February or early March as businesses focus on the domestic market and prepare for the Tet holiday.
In terms of domestic rice prices in the Mekong Delta region, prices remain at elevated levels. Various rice varieties such as IR 504, Fragrant rice 8, OM 18, OM 5451, Nang Hoa 9, and OM 380 continue to maintain stable prices.
Overall, the successful tender and the growth in rice exports to Indonesia indicate a positive outlook for Vietnam’s rice industry. The country’s competitive prices and the high demand from key customers like Indonesia contribute to its position as a leading rice exporter.
Source: Vietnam Plus
