Vietnam businesses seize more opportunity due to an additional rice import quota of 1.6 million tons from Indonesia

	Strengthening control of rice imports and exports and preventing risk of origin fraud
	China increases rice imports, a good opportunity for Vietnam
	Prevention of price risks before news that Indonesia increases rice imports in reserve

Vietnam's rice exports grasp more opportunities when Indonesia increases imports. Illustration photo: TTXVN

Vietnam Trade Office in Indonesia informed 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 to make amends for the shortage of domestic rice. 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. Vietnam Trade Office in Indonesia said that with an additional 1.6 million tons of imported rice, the total amount of rice quota the Indonesian Government decided to import in 2024 will be 3.6 million tons. So far, the Indonesian Ministry of Trade has granted rice import licenses for 2 million tons. The import license for an additional 1.6 million tons will soon be issued after completing a number of related administrative procedures. According to the Trade Office, in recent days, rice prices in the Indonesian market are increasing sharply due to a serious supply shortage. As of February 2024, Indonesia has experienced eight consecutive months of rice deficit due to domestic production falling short of demand. The phenomenon of rice scarcity in supermarkets has appeared. The Indonesian Trade Minister had to ask people to switch to buying price-stabilized rice from the Government to avoid rice prices rising too high on 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 government ceiling price 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 volume of rice imported from Thailand, Pakistan, Myanmar, Vietnam and Cambodia is 237.64 thousand tons, 129.78 thousand tons, 41.61 thousand tons, 32.34 thousand tons and 2.5 thousand tons, respectively. In 2023, Indonesia has risen to become Vietnam's second largest importer with output of more than 1.1 million tons, turnover of more than 640 million USD, a sharp increase of 878% in volume and up to 992% in value compared to 2022. According to the Vietnam Trade Office in Indonesia, the current shortage of rice is worsen because the main harvest season has not yet begun and the Muslim holy month of Ramadan will begin in the middle of March 2024 and last within 1 month, while the demand for food keeps increase sharply. It is predicted that the Indonesian Government will have to open bids to buy more rice soon, in addition to the recent bid opening to purchase 500,000 tons of rice on January 17, 2024 (in which Vietnamese rice exporters won the bid to supply more than 300,000 tons of rice). Therefore, the Vietnam Trade Office in Indonesia notes that Vietnamese rice exporters 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. Statistics recently released by the General Department of Customs show that 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 brought the total amount of rice exported 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 amount of rice exported increased by 14.4% (equivalent to an increase of more than 83,000 tons); Meanwhile, turnover increased by 53% (equivalent to an increase of nearly 161 million USD). Turnover increased higher than volume, so the average rice export value is up due to the higher volume in early 2024 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, since early days of the New Year 2024, rice exports grew strongly in all three criteria: volume, turnover and average value.

The year 2023 has recorded record numbers of rice exports. Specifically, the amount of rice exported reached 8.1 million tons, an increase of 14.4% and the turnover reached 4.68 billion USD, an increase of 35.3% over the previous year. In 2023, ASEAN will be 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.