23 May 2024 | 16:55 UTC

Indonesia awards rice export contracts to Vietnam, rejects Thai offers

Highlights

Vietnamese rice at lowest price in Indonesia's tender

Thailand fails to secure lots due to its high prices

Myanmar secures 60,000 mt, outbids Pakistan

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Vietnam secured six lots to export 150,000 mt of 5% broken white rice in a recent tender by Indonesia's procurement agency, Bulog, trade sources said. However, Vietnamese rice prices are not expected to benefit from the tender result announcement, market sources said.

A Singapore-based trader noted that Bulog had specified a fixed quantity for Vietnam in the tender, so the prices weren't significantly impacted. The lowest offer from Vietnam was approximately $564.5/mt CNF, making it the most competitive in the tender.

Some Vietnamese sellers lowered their offers due to a lack of fresh export demand, with Platts, part of S&P Global Commodity Insights, assessing Vietnamese 5% broken white rice down $10/mt week on week to $569/mt FOB on May 23.

In contrast, Thailand failed to secure lots due to its high prices, with the lowest offer from Thai sellers at $649/mt CNF. Thailand was eligible to submit an offer for 90,000 mt out of the total 300,000 mt. It remains uncertain if Bulog will retender these lots. A trader said that Thai prices are expected to see a bearish trend in the coming days following this outcome.

Myanmar managed to secure 60,000 mt with offers ranging from $621/mt to $629/mt CNF, while Pakistani exporters were outbid by more competitive offers from Myanmar.

Recently, Indonesia announced a new tender to purchase 300,000 mt of 5% broken white rice. Indonesia has so far issued five tenders in 2024, purchasing 1.7 million mt of rice. Vietnam, Thailand, Myanmar and Pakistan have been the major suppliers to the Southeast Asian nation this year.

Bulog has set an import quota of 3.6 million mt for 2024. It is possible the full quota will be utilized as dry conditions attributed to the El Niño weather pattern have delayed harvests, threatening Indonesian output and tightening global rice supplies.