Indonesia's Bulog reissues 500,000 mt rice tender amid weaker Asian prices

Indonesia’s state-owned purchasing agency Bulog reissued a revised ninth tender for 2024 on Oct. 24, seeking to buy 500,000 mt of 5% broken white rice milled within the last six months, according to an official invitation sent to select suppliers and seen by S&P Global Commodity Insights.

Bulog's announcement comes as Asian rice prices across origins have fallen after India lifted its ban on non-basmati WR exports in September.

Platts, part of Commodity Insights, assessed Vietnamese 5% broken WR at $519/mt FOB on Oct. 24, down $10 on the week. The Thai 5% broken WR price fell $26 on the week to $489/mt FOB, while the Pakistani 5% broken WR price declined $22 on the week to $460/mt FOB. The India 5% broken WR price decreased $26 on the week to $464/mt FOB, while the Myanmar 5% broken WR price was unchanged week on week at $500/mt FOB on Oct. 24.

Bulog aims to procure WR from India, Vietnam, Thailand, Cambodia, Myanmar and Pakistan for delivery from November to Dec. 20, 2024, according to a notification from Indonesia’s national agricultural agency.

The agency canceled its Oct. 22 tender, citing some internal policy guidelines.

In its eighth tender, Bulog awarded a total of 450,000 mt of WR to suppliers from Pakistan, Vietnam, Myanmar and Thailand. Prices ranged from $539.34/mt to $574/mt CNF, with Myanmar submitting the lowest bid and Thailand the highest, according to trade sources. The tender's results were released on Sept. 25.

Suppliers in Pakistan won eight out of the total 15 lots for the shipment of 238,100 mt of 5% broken WR. Myanmar secured four lots totaling 121,100 mt, while Vietnam won two lots for the shipment of 59,000 mt. Thailand clinched a single lot to supply 31,800 mt of rice.

The Indonesian state purchasing agency has set an import quota of 3.6 million mt for 2024 against last year's 3.8 million mt.

In the calendar year 2024, Indonesia has issued nine tenders so far for 3.1 million mt of rice.

Market sources said the full quota might be utilized, as dry conditions due to the El Nino weather pattern have delayed harvests, threatening to slash Indonesian output and tighten global rice supplies.

Commodity Insights analysts expect Indonesia's rice imports to drop 44.4% on the year in the 2024-25 marketing year (January-December) to about 2 million mt. The US Department of Agriculture has estimated the inflows to slump 60.5% on the year to 1.5 million mt.

Indonesia's rice production is expected to return to more normal levels of 34 million-34.5 million mt in MY 2024-25, rising 3%-4.5% on the year, according to Commodity Insights analysts. The USDA has projected the output to increase 3% on the year to 34 million mt.