Con­tin­ued price drop makes King­dom’s pep­per un­prof­itable

Tesla Model 3 de­liv­er­ies due to start in Fe­bru­ary

The Phnom Penh Post - - BUSINESS - Cheng Sokhorng

THE King­dom’s non-GI pep­per farm­ers con­tinue to strug­gle due to low prices while cul­ti­va­tion is pro­jected to de­cline next year, said DarMe­mot Pep­per Agri­cul­ture Devel­op­ment Co­op­er­a­tive ex­ec­u­tive di­rec­tor Yin Sopha.

Sopha said t he mar­ket price for non-GI pep­per t his year is still un­der the mar­gin of cost pro­duc­tion, as the sec­tor is ex­pected not to ex­pand next year.

Since the be­gin­ning of the har vest sea­son, pep­per prices have stood at $2.6 per kg, which are un­der the profit mar­gin. He said the lower price is due to t he globa l mar­ket.

“Pep­per prices can­not in­crease any­more, as the pep­per in­dustr y’s globa l sup­ply is more than the need – t he price is not ben­e­fi­cial for farm­ers and t he grow t h of cul­ti­va­tion will not in­crease any­more.”

Sopha said that the sec­tor would no longer be a v iable in­vest­ment op­tion if prices keep drop­ping.

A new fed­er­a­tion

As of 2016, the King­dom had 5,000ha of pep­per fields, ac­cord­ing to a re­port from t he Min­istr y of Agri­cul­ture, Fore­str y and Fish­eries, which claimed the countr y’s pep­per ex­ports grew from 1,050 tonnes i n 2016 to 2,698 tonnes last year.

The gov­ern­ment has formed a new fed­er­a­tion for t he countr y’s pep­per in­dustr y to en­hance the mar­ket and solve chal­lenges in t he sec­tor, as t he cash crop is cur­rent ly fac­ing de­pressed prices.

The Cam­bo­dia Pep­per and Spice Fed­er­a­tion was joint ly formed last month by the Min­istr y of Com­merce and t he Min­istr y of Agri­cul­ture, Fore­str y and Fish­eries.

The fed­er­a­tion will pro­mote t he va lue of pep­per and look for new mar­kets, es­pe­cia lly for non-GI pep­per so t hat farm­ers will not rely on in­for­mal ex­ports to Thai­land and Viet­nam.

AMRU Rice (Cam­bo­dia) Co Ltd CEO Song Saran, who has been elected as t he fed­er­a­tion’s pres­i­dent, said it was look ing for technica l as­sis­tance be­fore set­ting up to ad­dress key is­sues.

“We have no up­date yet about pep­per prices. Right now we are look ing for technica l as­sis­tance to sup­port t he fed­er­a­tion. We will ad­dress t he key is­sues hap­pen­ing now and for­mu­late f urt her ac­tion,” he said.

Vorn Savourn, a pep­per farmer in Tbong Kh­mum prov­ince’s Me­mot district who owns a 5ha pep­per field, said t he in­dustr y st ill re­lies on in­for­mal buy­ers.

“I have no hope for an in­crease in pep­per prices. Most [pep­per] farm­ers here [are con­sid­er­ing selling t heir farms] since they can­not pay back loans,” he said, adding t hat pep­per farm­ing is no longer a good choice for farm­ers as t here is no sus­tain­able mar­ket.” TESLA Mo­tors said on Wed­nes­day it will be­gin Euro­pean de­liv­er­ies of its long-awaited mass-mar­ket Model 3 elec­tric car from Fe­bru­ary.

A spokesper­son told AFP the first to take de­liv­ery would be cus­tomers who had re­served their Model 3 start­ing March 2016 if they con­firm their or­der by Jan­uary 1.

The spokesper­son said cus­tomers would be in­vited to con­firm over the com­ing weeks, start­ing on Wed­nes­day.

Tesla’s mid-size, four-door all-elec­tric fam­ily car was first un­veiled in its US home base in July last year.

Con­tro­ver­sial founder Elon Musk in Oc­to­ber de­scribed the Model 3 as “the best-selling car in the US in terms of rev­enue and the 5th best-selling car in terms of vol­ume”.

Musk, re­cently forced to step back from the role of chair­man over a tweet in which he said he planned to take the firm pri­vate, says he wants to make the Model 3, which cur­rently starts at around $50,000, a “main­stream prod­uct.”

With its mid-range bat­tery pack the Model 3 is more com­pact and lighter than the brand’s lux­ury S and X mod­els and is de­signed to make Tesla world leader as a pro­ducer of elec­tric cars as it scales up pro­duc­tion ca­pac­ity.

The com­pany has in re­cent weeks seen sales vol­umes com­pa­ra­ble to more es­tab­lished marques such as Ger­man trio Audi, BMW and Merc e des, de­spi t e its much nar­rower prod­uct range.

Tesla now looks to have over­come pro­duc­tion ca­pac­ity con­cerns which have wor­ried in­vestors for months. Be­tween Jan­uary and Septem­ber the firm said global de­liv­er­ies of all mod­els had reached 126,000 – more than 53,000 of those com­ing in the third quar­ter.

If the brand can keep that up then de­liv­er­ies this year are set to hit around 180,000 com­pared with 100,000 last year.

For the time be­ing, Euro­pean cus­tomers will only have two Model 3 op­tions.

One is a long-range ver­sion de­liv­er­ing 544km on a sin­gle charge cost­ing from around € 60,000 ($ 68,017) be­fore any in­cen­tives such as the “ecobonus” in France worth € 6,000. A dua l-mo­tor Per for­mance model sta r ts f rom a round € 70,000.

Tesla has promised to sup­ply much cheaper ver­sions in due course, com­ing nearer to the ini­tial $35,000 pric­ing.

The au­tomaker has not in­di­cated how many Model 3 reser­va­tions Euro­pean clients have made.


Dar-Me­mot Pep­per Agri­cul­ture Devel­op­ment Co­op­er­a­tive ex­ec­u­tive di­rec­tor Yin Sopha says the mar­ket price for non-GI pep­per is still un­der the mar­gin of cost pro­duc­tion.

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