The General Department of Customs (GDC) reported that Vietnam’s rice exports to Indonesia had reached 712,400 tons by the end of June, worth $444.4 million, an increase of 44.6 percent in export volume and 82.1 percent in export value.

The Indonesian market consumed 15.4 percent of Vietnam’s total rice exports in the first half of 2024, the second largest customer, following the Philippines.

Vietnam’s Trade Office in Indonesia reported that Bypanas, the Indonesian National Food Agency, has predicted that the country would need 5.18 million tons of rice imports this year, instead of 3.6 million as licensed by the government before.

However, Vietnam’s rice exports to Indonesia may be at a disadvantage because Bulog, Indonesia's National Logistics Agency, and Bypanas, have been sued by the People’s Democracy Study (SDR) at the Indonesia Corruption Eradication Commission (KPK).

Indonesian media reported that Prasetyo Adi of SDR on July 3 officially lodged an appeal against Bapanas and Bulog presidents to the KPK.

The suspicion of embezzlement was indicated by the marking up of rice imports from Vietnam, related to rice-import stagnation at Tanjung Priok Port (delayed unloading), which resulted in late-loading fines, thus increasing rice prices.

SDR estimated that the state’s loss from the embezzlement was 2 trillion rupiahs, after taking into account the price gap offered by a Vietnamese company of $82 per ton. With the exchange rate of 15,000 rupiahs to one US dollar, the difference would be $180.4 million.

With an import volume of 2.2 million tons in the first five months of the year, the figure may total 2 trillion rupiahs.

The price gap was calculated by SDR after considering prices offered by Tan Long, a Vietnamese company.

However, Bulog has denied the accusation. It said that Tan Long offered rice prices, but there was no official price offer to Bulog since the auctions opened in early 2024. Tan Long has had no contract with Bulog this year.

The agency claims it is a victim of allegation of a mark-up of rice imports from Vietnam.

Mokhamad Suyamto of Perum Bulog said the allegation began when Vietnamese company Tan Long offered to sell 100,000 tons of rice at $538 per ton on the occasion of the Indonesian Minister of Agriculture’s visit to the group’s husking workshop last May.

Vietnam’s Trade Office in Indonesia says the embezzlement allegation, which is still under investigation with no official decision yet, may seriously affect Indonesia’s rice imports from Vietnam from now to the end of 2024.

It is highly possible that Indonesia will stop organizing bids to seek Vietnamese supplies so that KPK has time to investigate the allegation, and Bulog may not buy rice from Vietnam in order to avoid an allegation of fraud.

Some analysts have advised Vietnamese rice export companies to be cautious when making any statements and transactions to avoid possible adverse effects to rice exports.

They said rice exporters need to unite to protect the image of Vietnamese rice and the rice farming sector. An unhealthy competition among export companies would cause interest groups in Indonesia to engage in exploitation, which would harm Vietnam’s rice exports.

In the latest news, Bao Cong Thuong (Industry and Trade Newspaper) quoted Truong Sy Ba, president and CEO of Tan Long Group (TLG), as saying that in Bulog’s history of opening bids to seek rice suppliers, and since 2023, Tan Long has won only one bid to provide 30,000 tons of rice via Posco (South Korea), and has not directly won any bid from Bulog.

Under the bid, Tan Long provided 30,000 tons of rice at $620 per ton. The time of the winning bid was January 2024, before the Tet holiday in Vietnam, with delivery from February 25 to March 15. However, as per the request from Indonesia, Tan Long only delivered in April.

Tam An