Indonesia's Bulog awards eighth rice tender to Myanmar, Vietnam, Thailand; Pakistan wins 8 lots

Indonesia's state procurement agency Bulog has awarded its eighth rice purchase tender of 2024 to Pakistan, Vietnam, Myanmar and Thailand, with Pakistan winning over half of the total lots, sources told S&P Global Commodity Insights Sept. 25.

Despite winning the tender, prices for Pakistan 5% white rice are expected to remain under pressure amid high supply. Vietnamese 5% WR and Thailand 5% WR prices are also likely to decrease amid staggered demand. Conversely, the Myanmar 5% white rice price is expected to firm up in the short term, driven by recent rains and storms that have caused supply-side issues.

Pakistan suppliers came out as winners of eight lots out of the total 15, successfully securing the tender to export 238,100 metric tons of 5% broken white rice. Myanmar obtained four lots totaling 121,100 metric tons, while Vietnam won two lots for the shipment of 59,000 metric tons. Additionally, Thailand clinched a single lot to export 31,800 metric tons of rice.

According to the tender results, Pakistan secured lots priced in the range of $554.70/t and $567.50/t CNF. Thailand won one lot at $574/t CNF, the highest bid, competing against Pakistan and Cambodia. Myanmar offered the lowest bid at $539.34/t CNF, with other bids ranging from $547/t to $550/t CNF, making them the most competitive. Vietnam bagged two lots at $548/t CNF.

Bulog intended to source 450,000 metric tons of 5% broken WR from Vietnam, Thailand, Myanmar, Cambodia and Pakistan, with delivery scheduled for October-November, as per the notification released by Bulog Sept. 12.

5% WR prices of most origins had soft undertones for over a week.

Platts, part of S&P Global Commodity Insights, assessed Myanmar 5% broken WR at $499/t FOB FCL Sept. 20, dropping $11/t on the week, indicating a downward trend in the rice market.

Platts-assessed Thailand 5% WR was down $11/t on the week at $547/t FOB Sept. 25.

Meanwhile, the Platts-assessed Vietnamese 5% WR remained stable at $544/t FOB Sept. 25, and Pakistani 5% broken WR at $540/t FOB Sept. 25, both unchanged on the week.

While market participants expect prices to soften, a few Pakistani exporters anticipate no impact from this tender on Pakistani prices.

"It seems there are no bearish or bullish trends for Pakistan's rice market now. Demand remains strong due to various tenders and increasing requirements for the new crop ahead of Christmas. Additionally, paddy supply in Pakistan is steadily rising from both Punjab and Sindh. Therefore, prices for Pakistani white rice are likely to remain stable," a Pakistani exporter said.

However, a few Vietnamese exporters lowered their offers by $3-$5/mt for 5% WR on the day, following the tender results.

Vietnamese rice exporters said 5% WR prices would decrease on lowered demand and reduced rice quality due to Storm Soulik.

In the previous tender, Thailand, Pakistan, and Cambodia competed for nine lots totaling 269,900 metric tons for Indonesia. However, Pakistan could onlysecure one lot to supply 27,950 metric tons.

According to Pakistan exporters, the eighth tender has been a key opportunity where they outperformed suppliers from Thailand, Cambodia and Vietnam due to better-quality crops arriving in bulk in October.

Indonesia has purchased 2.58 million metric tons of rice so far this year through the eight tenders issued, using over 72% of the quota. Bulog has set an import quota of 3.6 MMt for 2024, 5% down from the previous year's 3.8 MMt.

It is possible that the full quota will be utilized, as dry conditions attributed to El Nino weather patterns have delayed harvests, posing a threat to Indonesian output.