Opportunity for Vietnam as Indonesia imports an additional 1.6 million tons of rice

(HQ Online) - This is an opportunity for businesses exporting rice in the first months of the year to the Indonesian market.

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Vietnam's rice exports have more opportunities as Indonesia increases imports. Illustrative photo: VNA

The Vietnam Trade Office in Indonesia reported that on February 26, 2024, Indonesian Trade Minister Zulkifli Hasan said that the Indonesian Government has just decided to increase the rice import quota in 2024 by 1.6 million tons due to a shortage of domestic rice production.

This situation stems from the delay in planting the main crop of the year due to lack of water for cultivation, affected by the El Nino phenomenon in 2023. As expected, the harvest of this rice crop will take place in May and June 2024 instead of March and April every year.

According to the Vietnam Trade Office in Indonesia, with an additional 1.6 million tons of imported rice, the total rice quota that the Indonesian Government has decided to import in 2024 will be 3.6 million tons.

So far, the Indonesian Ministry of Trade has issued rice import permits for 2 million tons. Import permits for an additional 1.6 million tons will be issued soon after completing some related administrative procedures.

According to the Trade Office, in recent days, rice prices in the Indonesian market have increased sharply due to a serious shortage of supply. As of February 2024, Indonesia has experienced 8 consecutive months of rice deficit due to domestic production falling short of demand. Rice shortages have appeared in supermarkets.

The Indonesian Trade Minister has asked people to switch to buying government-regulated rice to avoid the price of rice rising too high in the open market. The retail price of rice in the market is up to 80,000 rupiah (equivalent to 5.17 USD)/5kg compared to the government's ceiling price of only 69,500 rupiah (4.45 USD)/5kg.

According to the Indonesian Statistics Agency, in January 2024, the country imported 441.93 thousand tons, an increase of 82.19% compared to January 2023 with a value of 279.2 million USD. Of which, the amount of rice imported from Thailand was 237.64 thousand tons, Pakistan was 129.78 thousand tons, Myanmar was 41.61 thousand tons, Vietnam was 32.34 thousand tons, Cambodia was 2.5 thousand tons.

In 2023, Indonesia rose to become Vietnam's second largest importer with an output of more than 1.1 million tons and a turnover of more than 640 million USD, a sharp increase of 878% in volume and 992% in value compared to 2022.

According to the Vietnam Trade Office in Indonesia, with the current severe rice shortage, in the context of the main harvest season not yet starting and the Muslim month of Ramdan starting in mid-March 2024 and lasting for 1 month, the demand for food and foodstuffs will continue to increase sharply. It is forecasted that the Indonesian Government will have to continue to open bids to buy more rice soon, in addition to the bid to buy 500,000 tons of rice on January 17, 2024 (in which Vietnamese rice exporting enterprises won bids to supply more than 300,000 tons).

Therefore, the Vietnam Trade Office in Indonesia notes that Vietnamese rice exporting enterprises need to closely monitor market information and take advantage of opportunities to export rice in the first months of the year to the Indonesian market.

According to statistics recently released by the General Department of Customs, in the first half of February (February 1-15), Vietnam exported 150,944 tons of rice, with a turnover of 104.34 million USD. The above results bring the total rice export volume from the beginning of the year to February 15 to 663,209 tons, with a turnover of 466.6 million USD.

Compared to the same period in 2023, the volume of exported rice increased by 14.4% (equivalent to an increase of more than 83,000 tons); while the turnover increased by 53% (equivalent to an increase of nearly 161 million USD).

The turnover increased higher than the volume, so the average rice export value in early 2024 also increased higher than the same period last year. Specifically, the average value reached more than 703 USD/ton, an increase of 33.65% (the same period in 2023 only reached about 526 USD/ton).

Thus, at the beginning of the new year 2024, rice exports will grow strongly in all three criteria: volume, turnover and average value.

2023 saw record numbers for rice exports. Specifically, the volume of exported rice reached 8.1 million tons, up 14.4% and the turnover reached 4.68 billion USD, up 35.3% over the previous year.

In 2023, ASEAN is Vietnam's largest rice export market, accounting for 61% of the country's total rice exports with 4.9 million tons, an increase of 24% over the previous year.

Source