King­dom’s rice ex­ports down 1.5%

The Phnom Penh Post - - BUSINESS - Cheng Sokhorng

THE King­dom’s rice ex­ports saw a 1.5 per cent drop last year com­pared to 2017 due to the in­dus­try’s lin­ger­ing chal­lenges – the cost of pro­duc­tion and com­pe­ti­tion with the in­ter­na­tional mar­ket.

Min­istry of Agri­cul­ture, Forestry and Fish­eries fig­ures show that the coun­try ex­ported 626,225 tonnes of rice last year, de­creas­ing 1.5 per cent from 635,679 tonnes in 2017.

Ac­cord­ing to the fig­ures, the main des­ti­na­tions for rice ex­ports were the EU with a to­tal of 269,127 tonnes and China with 170,154 tonnes.

Min­istry spokesman Srey Vuthy said high pro­duc­tion costs hin­dered com­pe­ti­tion with an in­ter­na­tional mar­ket.

“De­spite rice fa­cil­i­ties al­ready be­ing de­vel­oped for the rice in­dus­try, our rice ex­ports are still de­creas­ing.”

Phou Puy, CEO of Thaneakea Srov (Kam­puchea) Plc, one of the King­dom’s ma­jor rice ex­porters, which is head­quar­tered in Bat­tam­bang prov­ince, noted that while his com­pany con­tin­ues to see an in­crease in rice ex­ports, the King­dom’s ex­ports show an over­all de­crease.

He said the de­crease is due to lim­ited paddy buy­ing ca­pac­ity, as rice millers and ex­porters face stiff com­pe­ti­tion for the price of their paddy from bro­kers of neigh­bour­ing coun­tries.

“A ma­jor chal­lenge for the in­dus­try is a short­age of cap­i­tal – rice millers will not dare buy paddy at a higher rate and com­pete with neigh­bour­ing coun­tries.

“Even though we have [launched] some rice stor­age and dry­ing [fa­cil­i­ties], there is no paddy in stock and this im­pacts rice ex­ports,” he said.

With more rice fa­cil­i­ties con­stantly be­ing in­stalled, the price of paddy for the 2018-2019 sea­son stands be­tween 900 riel and 1,300 riel ($0.22 and $0.32) per kg – a bet­ter price for farm­ers com­pared to the pre­vi­ous sea­son, ac­cord­ing to in­dus­try in­sid­ers.

Vuthy said that it is hard to en­vi­sion what lies in store for rice ex­ports this year.

“There are many fac­tors of the chal­lenges needed to be dis­cussed and they need time to solve – in­clud­ing lo­gis­tic and elec­tric­ity costs, which add to pro­duc­tion costs and im­pede com­pe­ti­tion with the in­ter­na­tional mar­ket,” he said.

Cam­bo­dia Rice Fed­er­a­tion vi­cepres­i­dent Vong Bun Heng said fear of the EU im­ple­ment­ing a safe­guard, which will al­low EU mem­ber states to im­pose bar­ri­ers to pro­tect against trade im­bal­ances, is the main con­trib­u­tor to rice ex­port slow­down.

“Some in­ter­na­tional buy­ers hes­i­tate to place orders when they hear about [a pos­si­ble] im­ple­men­ta­tion of the EU safe­guard. There is a need for our rice, but the choice of buy­ers is lim­ited,” he said.

Cen­tre for Pol­icy Stud­ies di­rec­tor Chan Sophal said the King­dom’s rice in­dus­try may even­tu­ally find it­self in a crit­i­cal con­di­tion.

“I think the ex­port of milled rice from Cam­bo­dia will be very dif­fi­cult, due to a lack of com­pe­ti­tion in the post-har­vest sec­tor, es­pe­cially if it is sub­ject to tar­iffs im­posed by the EU.

“Farm­ers will have to rely on paddy rice buy­ers from neigh­bour­ing coun­tries,” he said.

HENG CHIVOAN

A worker at a Bai­tang (Kam­puchea) Plc-owned rice mill in Bat­tam­bang prov­ince in 2017.

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