Vietnam, Myanmar secure rice export contracts with Indonesia, while Thailand, Pakistan miss out

Vietnam has secured seven contracts to export 185,000 mt of 5% broken white rice to Indonesia, while Myanmar has secured five lots to export 135,000 mt of rice, trade sources said.

Market sources indicate that Vietnamese white rice prices are expected to stabilize following the tender results.

The market anticipated that Vietnam would win most of the lots in the latest Bulog tender due to its competitive pricing.

"It seems the result will not support the Vietnamese market as the price done is cheap," one Singapore-based trader said.

Meanwhile, other Vietnam-based exporters said that white rice prices would stabilize.

Vietnam and Myanmar dominated the tender in volume terms. The overall winning bids for the 12 lots were $563/mt CNF each, with seven lots from Vietnam and five from Myanmar.

Platts, part of S&P Global Commodity Insights, assessed Vietnamese 5% broken white rice at $540/mt FOB on Aug. 1, up by $6/mt week on week.

Platts also assessed Myanmar 5% broken WR FOB at $549/mt, close to a yearly low. Thai 5% broken white rice FOB was assessed at $568/mt on Aug.1, down by $2/mt week on week. Pakistani 5% broken WR was assessed at $566/mt FOB on Aug. 1, reaching an almost eight-month low.

"How can Thailand win anything? Bids are already down," one Thailand-based trader said, adding that following the outcome of the tender result, the Thai rice market is expected to be bearish in the coming days.

Thailand and Pakistan were unable to secure any lots due to their higher prices, with the lowest bids from Thailand-based sellers at $584.50/mt CNF and from Pakistan-based sellers at $588/mt CNF.

According to a Pakistan-based exporter, Pakistan does not have stocks to deliver in August-September and will have fresh crops available in October.

Another exporter mentioned that bulk freight from Pakistan is more expensive due to longer transit times compared to Vietnam.

Breakbulk freight rates from Pakistan to major Indonesian ports were reported at $48/mt for August shipments, whereas rates from Ho Chi Minh City were in a range of $30-$40/mt.

Cambodian sellers did not participate in the recent Bulog tender due to the higher price of Cambodian rice compared to Thailand and Vietnam, sources said.

Cambodian exporters and millers have very limited stock with to offer, causing further constraints, a Cambodian exporter said.

"The container shortage is also causing a hindrance, as directing shipments to Indonesia will result in shipments to Europe and other markets being affected," the source added.

On July 19, Indonesia announced a new tender to buy 320,000 mt of 5% broken white rice in July, open to Vietnam, Thailand, Myanmar, Cambodia, and Pakistan, with the arrival period set from August through September 2024.

The Indonesian state purchasing agency has set an import quota of 3.6 million mt for 2024, compared to last year's 3.8 million mt.

So far in 2024, Indonesia has issued six tenders, purchasing nearly 2 million mt of rice, using a little over half of the quota. Vietnam, Thailand, Myanmar, and Pakistan have been the main rice suppliers to Indonesia this year.

Additionally, dry conditions attributed to the El Nino weather pattern have delayed harvests in Indonesia, threatening output and tightening global rice supplies.