The tender invitation specifies that Indonesia is inviting bids for 350,000 tons of 5 percent broken white rice and will favor suppliers to Vietnam, Thailand, Cambodia, Myanmar and Pakistan.
In the first half of 2024, Indonesia averaged tenders for about 300,000 tons of rice each month. Since July, Bulog increased the tender quantity by 20,000, bringing the total to 320,000 tons.
However, the tender results fell short of expectations, with the country purchasing only 200,000 tons. To meet its demand, Bulog has set an unprecedentedly high target of 350,000 tons for the August tender.
Indonesia's call for larger rice tenders is a major opportunity for rice exporters, particularly those from Vietnam, given the current uncertainties in the global rice market
"Indonesia's increased invitation to bid for rice is a positive signal for Vietnam's rice export industry. In the bidding round last July, Vietnamese enterprises won the most bids with seven out of 12 lots, accounting for 185,000 tones of rice,” said General Director of Can Tho Rice Export Joint Stock Company Nguyen Van Nhat.
This shows that Vietnamese rice still maintains a strong competitiveness compared to other sources.
“Although Vietnam's rice export price is currently the highest in the world, reaching US$578 per ton, we believe that the increase in demand from Indonesia will create opportunities for us to continue exploiting this market," he said.
He added that the current supply of Vietnamese rice is constrained due to the nearing end of the summer-autumn crop and the autumn-winter crop not yielding a large quantity.
As a result, rice prices will remain high, which could affect price competitiveness. However, the large demand from countries like the Philippines could alleviate some of the price pressure.
Given the current market conditions, Vietnamese rice exporters are approaching tenders with caution to avoid "selling more and losing more" he said.
"We are carefully weighing the pros and cons before bidding, especially considering the premium prices of our rice in the global market."
In the first seven months of 2024, Vietnam exported nearly 5.3 million tons of rice, earning US$3.34 billion. The figures set new records for Vietnam's rice industry compared to the same period in previous years, including 2023.
According to forecasts from the Ministry of Agriculture and Rural Development, Vietnam is expected to have another successful year of rice exports, with a target of exporting 7.5-8 million tons of rice and exceeding US$5 billion in export revenue.
