A worker carries a sack of rice at the warehouse in Jakarta. (Reuters Photo)

HAMBURG- Indonesian state purchasing agency Bulog is believed to have purchased about 320,000 metric tons of rice in an international tender late last week, European traders said on Monday.

Traders said 185,000 tons of rice is expected to be sourced from Vietnam and 135,000 tons from Myanmar, and all of it is thought to have been purchased at an estimated at $563 a ton cost and freight free out.

Reports reflect assessments from traders and changes in price and volume estimates are still possible later.

The deadline for submissions of price offers in the tender was July 31. Bulog traditionally starts price negotiations after initial offer submissions which usually last several days, traders said.

Bulog sought white rice of 5 percent broken grade from the 2024 crop year milled not longer than six months ago, traders said.

The rice could be offered from Vietnam, Thailand, Myanmar, Cambodia and Pakistan with arrival in Indonesia between August and September.

The tender follows a series of large international purchases by Indonesia’s government in the first half of this year as part of efforts to boost rice imports to cool prices after a poor local crop.

Indonesia could import up to 4.3 million tons of rice this year if the domestic harvest is insufficient, the country’s National Food Agency said on July 22.

The country, which imported 2.22 million tons of rice between January and May, currently plans to import 3.6 million tons of rice this year.

Indonesia’s statistics agency has estimated that rice output for January to August will be 9.52 percent lower than the same period in 2023.

Domestic prices of the staple for the country’s 270 million people were almost 12 percent higher in June from a year earlier after crops were hit by adverse weather.

A staple for most of Indonesia’s 270 million people, the price of rice has climbed more than 16 percent since last year, as the El Nino weather phenomenon has cut rainfall across large parts of Asia in 2023, reducing cereal output and sparking food inflation pressure for some of the world’s most price-sensitive consumers.

Bulog has distributed more than 300,000 metric tons of rice from government reserves since January through hundreds of bazaars around the country, following reports of scarcity at other retail outlets.

The National Food Agency, which oversees Bulog, said it conducted 429 of the makeshift bazaars in January and plans 315 more by the end of February.

This year in Indonesia, planting delays and lack of rains have delayed the peak harvest by a month, with farm ministry data showing a rice supply deficit of 1.63 million metric tons in January and 1.15 million in February.

Indonesia, which imported record volumes of rice in 2023, has allocated an additional import quota of 1.6 million metric tons, on top of 2 million tons previously approved for 2024, potentially triggering further gains in global prices, which are near 16-year highs.

Published Date: August 6, 2024