Vietnamese companies win big 500,000-ton rice contract in Indonesia

Vietnamese businesses have won 2/3 of Indonesia's 500,000-ton rice import contracts, as announced by Bulog.


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The National Logistics Agency of Indonesia (Bulog) recently announced the completion of the bidding process and identified the winning enterprises for the 500,000-ton rice procurement package to increase food reserves.

Notably, Vietnam is the only country with multiple participating and winning companies in the published list. Specifically, three Vietnamese companies won two lots each. Loc Troi Group (LTG) won lots 8 and 14, while the Northern Food Corporation won lots 15+16 and the Southern Food Corporation won lots 3+9.

In addition, Gia International Trading Company won lot 6 and King Green Natural Food Company won lot 2. Kien Giang Import-Export Company won lot 12, and Phat Tai Food Company (Dong Thap) won lot 11. Therefore, with seven winning companies, Vietnam accounts for two-thirds of this 500,000-ton rice procurement package.

In addition to Vietnam, another trading unit, R&S Trader PTE from Singapore, won three lots: 10, 13, and 17.

According to data from Vietnam Customs, Vietnam’s rice export turnover in 2023 reached USD 4.6 billion, a 35% increase compared to the previous year. In 2023, Indonesia rose to become Vietnam’s second-largest importer, with a volume of over 1.1 million tons, earning over USD 640 million. This is a significant increase of 878% in volume and 992% in value compared to 2022. The export price reached USD 575 per ton, an 18.3% increase.

In terms of production, Vietnam is currently the fifth-largest rice-producing country and the third-largest rice exporter in the world. In 2023, Vietnam’s rice production reached over 43 million tons, a 2% increase compared to 2022. It is worth noting that Vietnam’s rice exports exceeded 8 million tons in 2023 – higher than the average of 6-7 million tons in recent years.

In Indonesia, prolonged drought caused by the El Nino weather phenomenon is estimated to reduce Indonesia’s rice production by 2% in 2023, while planting for the main harvest of 2024 has been delayed.

Indonesia’s meteorological agency, BMKG, forecasts that the El Nino phenomenon will persist until early 2024, gradually decreasing and ending in April. The estimated rice production for January 2024 in this country is 930,000 tons, and it is estimated to reach 1.32 million tons in February, while the monthly consumption is 2.54 million tons.

Data from Indonesia’s National Food Bureau (NFA) shows that the country’s rice reserves reached 7.46 million tons at the end of 2023, including the rice reserves of households and wholesalers. Sarwo Edhy, a senior official of the NFA, said: “Reserves will be sufficient until March, while the main harvest may be delayed until April and May.”

Some experts forecast that rice prices will remain high in 2024. India may continue to restrict rice exports following the election, and the impact of the El Nino phenomenon may last until the middle of this year.