Brian Jeffrey
The General Department of Customs (GDC) revealed that Vietnam’s rice exports to Indonesia had surged to 712,400 tons by the end of June, totaling $444.4 million. This marked a 44.6 percent increase in export volume and an 82.1 percent increase in export value.
Indonesia, the second-largest market for Vietnam’s rice exports accounting for 15.4 percent in the first half of 2024, following the Philippines.
Vietnam’s Trade Office in Indonesia indicated that Bypanas, the Indonesian National Food Agency, projected the need for 5.18 million tons of rice imports this year, up from the initially licensed 3.6 million tons by the government.
However, a lawsuit against Indonesia’s National Logistics Agency (Bulog) and Bypanas by the People’s Democracy Study (SDR) may put Vietnam’s rice exports to Indonesia at a disadvantage.
The SDR filed an appeal to the Indonesia Corruption Eradication Commission (KPK) accusing Bulog and Bypanas of embezzlement related to marked up rice imports from Vietnam, leading to delays and increased prices.
If proven, the estimated loss from the embezzlement could be substantial, impacting the trade between Vietnam and Indonesia.
Bulog refuted the allegations, claiming they had no official price offer from Tan Long, the Vietnamese company in question, as the auctions remained unopened in early 2024 and there was no contract signed with Tan Long that year.
Implications from this investigation may lead Indonesia to halt bids for Vietnamese rice imports until the matter is resolved, potentially affecting trade between the two countries.
It is advised that caution be exercised by Vietnamese rice export companies to prevent any adverse effects on exports and to maintain a positive image of Vietnamese rice in the international market.
In a recent statement, Truong Sy Ba from the Tan Long Group (TLG) mentioned that Tan Long had limited involvement in Bulog’s bids, winning only one bid in 2023 totaling 30,000 tons of rice provided to Posco (South Korea).
Tan Long’s bid in January 2024 for 30,000 tons of rice was delivered in April following requests from Indonesia, shedding light on the complexities of rice trading between Vietnam and Indonesia.
