Indonesia’s Rice Imports: A Boon for Vietnamese Exporters

Indeed, Vietnamese exporters benefit greatly from Indonesia’s increased purchases of rice. In 2023, Indonesia’s total rice imports amounted to $1.78 billion. Indonesia’s rice imports from Vietnam accounted for $668.87 million in 2023 at 1.14 million tons in quantity. Indonesia imports the most rice from Vietnam. In 2024, Indonesia aims to produce five percent of broken white rice, with Vietnam, Thailand, Cambodia, Myanmar, and Pakistan being its top suppliers. Indonesia’s increasing rice tenders are a positive sign for Vietnam’s rice export industry. The 4-digit HS code classification of rice is 1006. In this article, we will explore insights into Indonesia’s rice imports from Vietnam and how it has been a boon for Vietnamese exporters in recent times.

What are the factors driving Indonesia’s rice imports from Vietnam?

• Raised import quota: In 2024, the Indonesian government raised the country’s rice import quota by 1.6 million tons or 3.6 million tons altogether. This is because the country’s harvest was delayed by the El Nino weather trend, which resulted in a lack of rice.
• A rise in imports: Indonesia imported 441,930 tons of rice in January 2024, an 82% increase over the previous year. 32,340 tons of this were sourced from Vietnam.
• A rise in exports: Vietnam exported 8.1 million tons of rice in 2023, a 14% rise over the previous year.
• Increased rivalry: Vietnamese exporters will, nevertheless, need to contend with price competition from other nations.

Rising Indonesian Rice Demand: Opportunities for Vietnam’s Export Market Surge

Even though Vietnam now commands the highest export rice price in the world ($578,00 per ton), we think that rising Indonesian demand would present us with more chances to take advantage of this market.” Indonesia’s response to missing its procurement objective in July—when tenders for big quantities of rice were opened—is a rapid increase in the volume of tendered rice from 320,000 tons to 350,000 tons. Vietnam, Thailand, Myanmar, and Pakistan are Indonesia’s primary suppliers of rice, and the country has already opened tenders to buy more than 2.5 million tons of grain this year. Seven of the twelve bids from Vietnamese businesses that participated in the most recent tender to buy 320,000 tons of rice last July were successful in securing 185,000 tons. VinaFood 1 became victorious with the biggest tender, totaling 104,000 tons.

Indonesia’s rice imports from Vietnam in the last 10 years

• 2013: $97.30 million
• 2014: $143.43 million
• 2015: $202.56 million
• 2016: $212.60 million
• 2017: $6.76 million
• 2018: $360.74 million
• 2019: $16.60 million
• 2020: $51.10 million
• 2021: $32.47 million
• 2022: $42.46 million
• 2023: $668.87 million
• 2024 (till June): $449.3 million

Major Indonesian rice importers who import rice from Vietnam in 2023-24

The top 10 rice importers in Indonesia who import Vietnamese rice are:

• PT. Tiga Pilar Sejahtera Food Tbk
• PT. Rajawali Nusantara Indonesia
• PT. Bulog (Badan Urusan Logistik)
• PT. Sumber Bumi
• PT. Indofood CBP Sukses Makmur Tbk
• PT. BISI International Tbk
• PT. Pangan Sejahtera
• PT. Nusantara Food
• PT. Cargill Indonesia
• PT. Mitra Sari

Importance of Rice in Indonesia’s Food Supply

Rice is a staple food in Indonesia, with the average Indonesian consuming around 140 kilograms of rice per year. Rice accounts for more than half of the total caloric intake of the average Indonesian. Given the importance of rice in the country’s diet, ensuring a stable and affordable supply of rice is a top priority for the Indonesian government. However, due to limited arable land and water resources, Indonesia is unable to produce enough rice to meet domestic demand. As a result, the country has had to rely on rice imports to bridge the gap between supply and demand.

Benefits of Indonesia’s rice imports for Vietnamese Exporters

Vietnam has emerged as one of the key beneficiaries of Indonesia’s growing appetite for rice imports. Vietnam is the world’s third-largest rice exporter, after India and Thailand, and has been able to capitalize on Indonesia’s increasing demand for rice. Vietnamese exporters have been able to tap into this lucrative market by offering competitive prices and high-quality rice varieties that cater to the preferences of Indonesian consumers. Furthermore, Vietnam’s geographical proximity to Indonesia gives Vietnamese exporters a logistical advantage, as they can easily transport rice to Indonesia via sea routes.

Impact on Vietnam’s Rice Industry

The surge in rice exports to Indonesia has had a vast impact on Vietnam’s rice enterprise. The elevated call from Indonesia has helped to reinforce rice production in Vietnam, as farmers ramp up cultivation to fulfill export necessities. This has brought about extended funding for agricultural infrastructure and generation, as well as improved farming practices to decorate the excellent yield of rice plants. Additionally, the influx of foreign exchange from rice exports has helped to reinforce Vietnam’s economic system, contributing to a common boom and improvement. However, the reliance on rice exports to Indonesia additionally poses certain demanding situations for Vietnam. Fluctuations in international rice costs, modifications in change guidelines, and competition from other rice-exporting countries can all impact Vietnam’s export prospects.

Conclusion

In conclusion, Indonesia’s rice imports have come to be a boon for Vietnamese exporters, supplying them with a lucrative market for its rice merchandise. The partnership between the 2 countries has now not only reinforced economic ties but also contributed to the steadiness and protection of Indonesia’s food supply. As Indonesia keeps relying upon rice imports from Vietnam to satisfy home demand, Vietnamese exporters stand to benefit from this mutually useful relationship for years yet to come.

Read Also: US Rice Imports worth $1.42 billion in 2023