Vietnamese rice exporter rejects ‘price inflation’ allegation amid corruption scam in Indonesia

By Dat Nguyen July 11, 2024 | 08:18 pm PT

A farmer works on a rice paddy field in central Quang Ngai Province, Vietnam. Photo by Reuters

Vietnamese exporter Tan Long Group has refuted an allegation by an Indonesian civil society organization that it sold rice to that country at much higher than market prices.

The People’s Democracy Study (SDR) recently complained to an Indonesian corruption watchdog that the government bought Vietnamese rice at "inflated prices," indicating corruption, according to the Vietnam Trade Office in Indonesia.

The National Logistics Agency (Bulog) and National Food Agency are the two government entities accused of wrongdoing.

Tan Long Group allegedly sold 100,000 tons of rice to Indonesia in May at US$538 per ton, 18% higher than market rates, according to SDR.

SDR claimed that since Indonesia imported 2.2 million tons of rice in the first five months of this year – from various sources -- the estimated loss to the country was around $180.4 million.

Tan Long Group has rejected the allegation, with a spokesperson telling VnExpress that it has never won any bid to sell directly to Bulog.

It did win a bid in January to export to Indonesia through a partnership with South Korean company Posco, but the price was $620 and the delivery took place in April, not May, the spokesperson added.

Another Vietnamese rice exporter, Loc Troi Group, also rejected the allegations.

Loc Troi won a bid in May to sell 100,000 tons to Bulog, but at $563 per ton, which was below the market rate at the time, it said.

Exports to Indonesia remain unaffected by the allegations, it added.

But the Vietnam Trade Office in Indonesia has warned that the allegation could affect Vietnam’s rice exports to Indonesia in the second half of the year.

If Indonesian authorities decide to start an investigation, they would stop importing from Vietnam for some time, it added.

Vietnamese customs data shows $444 million worth of rice has been exported to Indonesia this year, up 82.1% year-on-year.

In volume terms, it was up 44.6% to 712,400 tons.

Indonesia accounted for 15.4% of Vietnam’s exports, and was the second biggest buyer behind the Philippines.

Indonesia expects to import 5.18 million tons this year, up from an earlier forecast of 3.6 million tons.