Vietnamese rice increases export opportunities to Indonesian market

According to the Vietnam Trade Office in Indonesia, on February 26, 2024, Indonesian Trade Minister Zulkifli Hasan said that due to the shortage of domestic rice production due to the delay in planting the main crop of the year due to lack of water combined with the impact of the El Nino phenomenon in 2023, the Government of this country has just decided to increase the rice import quota in 2024 by 1.6 million tons.

As planned, the harvest of this rice crop will take place in May and June 2024, instead of March and April every year. Thus, with an additional 1.6 million tons of imported rice, the total amount of rice quota that the Government has decided to import in 2024 will be 3.6 million tons.

Gạo Việt thêm cơ hội tăng xuất khẩu sang Indonesia

Indonesia has decided to increase the rice import quota in 2024 by 1.6 million tons, giving Vietnamese rice more opportunities to be exported to this market. Illustrative photo

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.

Mr. Pham The Cuong - Trade Counselor of the Vietnam Trade Office in Indonesia said that 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 in supermarkets have appeared.

The Indonesian Trade Minister has had to ask people to switch to buying government-regulated rice to avoid rice prices rising too high in the free market. The retail price of rice in the market is up to 80,000 Rp (equivalent to 5.17 USD)/5kg compared to the ceiling price set by the government of only 69,500 Rp (equivalent to 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, from Pakistan was 129.78 thousand tons, Myanmar was 41.61 thousand tons, Vietnam was 32.34 thousand tons and 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, earning more than 640 million USD, a sharp increase of 878% in volume and 992% in value compared to 2022.

With the current severe rice shortage, in the context of the main harvest season not yet starting and the Muslim month of Ramadan starting in mid-March 2024 and lasting for a month, the demand for food 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 Trade Office recommends 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.

By the end of 2023, Vietnam's total rice export volume in 2023 reached 8.131 million tons, worth nearly 4.7 billion USD, up 14.4% in volume and 35.3% in value over the same period in 2022. This is the highest export result in the history of Vietnam's rice industry.

Continuing the growth momentum of 2023, in the first half of February 2024, rice exports reached 150,944 tons, worth 104.34 million USD; bringing the total rice export volume from the beginning of the year to February 15 to 663,209 tons, worth 466.6 million USD, up 14.4% in volume and 53% in value over the same period.

According to statistics, Vietnam is the country with the third largest rice export output in the world (7.6 million tons). With a solid foundation as a country developed from a rice civilization, rice is both the main food source and a strategic export item of Vietnam. Rice is the main agricultural export product of Vietnam, so it is not difficult for our country to become the Southeast Asian country with the world's leading rice export volume.

Source